Honeywell International Inc.’s (HON - Free Report) unit UOP LLC, announced that its C3 Oleflex process technology was chosen by Poland's Grupa Azoty to manufacture propylene, in a new facility in Police, in the Szczecin region of Poland.
The propylene is intended to make resins and plastics that will substitute metal parts in automobile, thus reducing automobile weight and enhancing fuel efficiency. The new unit, slated to come online in 2019, will have the capacity to produce nearly 400,000 metric tons annually of high-quality propylene. This will be enough to support the production of nearly 11 million cars per year.
Certain refining processes produce propylene as a by-product. However, in Europe, quite a few of such process units are shutting down or being converted to other processes that produce less propylene by-product. In Western Europe, propylene generated as a by-product is expected to reduce by around 4% over the next 5 years, while global propylene demand will shoot up by over 20%. Thus, on-purpose production of propylene is crucial for balancing the demand-supply divergence.
The ensuing propylene shortage has boosted investment in technology to manufacture on-purpose propylene from propane, which is either produced from petroleum refining or derived from natural gas. The new propylene facility will have a significant impact on the European petrochemical market.
In half a decade, on-purpose propylene production technologies, such as Honeywell UOP's Oleflex technology, will reportedly account for 20% of the world's propylene production. For over two decades, Oleflex has been a foremost technology globally for the conversion of propane to propylene.
Grupa Azot is one of Europe's leading chemical companies with a diversified product portfolio, ranging from engineering plastics and mineral fertilizers to oxo-alcohols and pigments.
Additionally, Honeywell UOP licensed its C4 Oleflex technology — a butane dehydrogenation process that converts isobutane into isobutylene. Honeywell UOP will also provide engineering design, adsorbents, catalysts, equipment, staff training and technical services for the project.
Honeywell UOP holds extensive experience with propylene projects throughout the world, and its Oleflex technology delivers excellent economics, reliability and product quality. Honeywell UOP strives to constantly upgrade the technology and the catalysts that it uses. Compared to competing dehydrogenation processes, the technology delivers the lowest cash cost of production, the smallest environmental footprint with low energy consumption and the highest return on investment.
Honeywell presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Hitachi Ltd. (HTHIY - Free Report) , Rollins Inc (ROL - Free Report) and Shanghai Industrial Holdings Limited , each holding a Zacks Rank #2 (Buy).
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