In a bid to tap into the U.S. shale gas boom, Flint Hills Resources LLC – a unit of Koch Industries, one of America’s largest companies – has purchased propylene producer PetroLogistics LP for US$2.1 billion.
The transaction is expected to close before the end of this year.
PetroLogistics' propane dehydrogenation plant at its headquarters in Houston, Tex., produces about 1.45 billion pounds of propylene per year. The firm posted sales of almost US$760 million in 2013, when it produced almost 1.1 billion pounds of propylene.
Propylene is a key petrochemical used to make plastics. It has traditionally been made from the oil distillate naphtha, but cheap shale is gaining importance as a feedstock.
"[PetroLogistics'] capabilities are well aligned with our existing chemical and refining business," Flint Hills CEO Brad Razook said in a statement.
Wichita, Kan.-based Flint Hills is a refining, chemicals, and biofuels company with operations primarily in Texas and the Midwest U.S. The company operates polypropylene plants in Texas and Michigan, and an expandable polystyrene plant in Illinois.