Economics of Propane Cracking

Following the same methodology for the cracking of ethane, the production cost of ethylene by propane cracking in an OPEN system is shown in Table 8.2. In this scenario, all of the products are on-sold to downstream operations or valued at an opportunity cost. 

The representative data for the OPEN, CLOSED and for the integration with polymer production is illustrated in Table 8.3. This illustrates that for the closed system when some of the valuable byproducts are degraded into fuel value streams, results in the operating margin are significantly reduced. This is restored to higher values when production is integrated with the downstream production of polymer as the product is sold. 

Under these conditions, the cracking of propane is seen as a less profitable operation relative to other feedstocks. This agrees with the trend over the past decade that as the relative cost of propane has risen. 

As is illustrated by this figure, the cost of production for the three scenarios considered is very sensitive to oil price. In this analysis there is little difference between the three scenarios. On close inspection it is seen that at low oil price, the OPEN system produces a lower cost as minor by-products are degraded to fuel value in the CLOSED system. 

However, as oil priee rises the gap eloses as increasing oil price impacts on the higher fuel cost in the OPEN system. 

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