A Texas company that produces propylene from propane believes increasing shale gas production in the US gives it an edge over rivals who rely on expensive oil byproducts. (image: arabianoilandgas.com)
A Texas-based company that processes propane into propylene is trying to raise $600 million in an initial public offering of stock, Reuters reported.
PetroLogistics LP filed papers with the US Securities and Exchange Commission on Tuesday. The Houston, Texas company said high oil costs are shutting down its rivals who rely on oil byproducts to make propylene. PetroLogistics LP produces propylene from propane gas, which is increasing in supply thanks to increased shale gas production in the US.
Propylene is one of the basic building blocks for petrochemicals used to produce paints, coatings, building materials, clothing, automotive parts, packaging and a range of other consumer and industrial products, 247wallst.com reported.
PetroLogistics LP said it owns and operates the world’s largest propane dehydrogenation facility and has multiyear contracts to sell propylene to Dow Chemicals, Total Petrochemicals USA and INEOS Olefins and Polymers USA. The company claims to be the only independent, dedicated propylene producer in North America. It is strategically located near the Houston Ship Channel and within 50 miles of about half of all US propylene consumption.
PetroLogistics LP posted a net loss of $22.9 million on sales of $105.8 million in the three months ended March 31. It is unclear how many units the company plans to offer or how much they will cost. But it plans to use proceeds from the offering to pay its sponsors, affiliates, executives and employees.
Founded in 2004, PetroLogistics LP is majority-owned by private equity firm Lindsay Goldberg and investment firm York Capital. The company intends to list its common stock on the New York Stock Exchange under the symbol “PDH.”