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UOP LLC, a Honeywell (NYSE: HON) company, announced Wednesday that its UOP C3 ?and C4 Oleflex processes have been selected by China's Shandong Chambroad Petrochemicals Co. to produce key petrochemicals.

The plant will be the first in China, and only the second in the world, to combine both processes, which are used to produce propylene and isobutylene, respectively. Propylene is a building block material used in the production of films and packaging, while isobutylene is a key ingredient for fuels and synthetic rubber.

"As the demand for petrochemicals grows, especially in China, producers are looking for opportunities to integrate processes to maximize product yields and reduce production costs," said Pete Piotrowski, senior vice president and general manager for Process Technology and Equipment at Honeywell's UOP.

"China's propylene consumption accounts for more than 15 percent of worldwide demand and is expected to grow by 5 to 6 percent per year. This is the first plant in the region to integrate our C?3 and C4 Oleflex technology in a single unit and this project will help meet demand more efficiently, while improving the facility's return on investment. This is a milestone for the region's petrochemical production and we look forward to working with Chambroad on this project."

The new units, expected to start up in 2014, will produce 133,000 metric tons of propylene and 87,000 metric tons of isobutylene annually at its facility in Binzhou City, Shandong Province, China. Honeywell's UOP will provide the engineering design, technology licensing, catalysts, adsorbents, equipment, staff training and technical service for the project.

The C?3 Oleflex process uses catalytic dehydrogenation to convert propane to propylene. The C4 Oleflex process uses catalytic dehydrogenation to convert isobutane to isobutylene. Using mixed dehydrogenation, the processes will be combined to produce both materials in a single unit.

Compared with competing processes, Oleflex technology provides the lowest cash cost of production and the highest return on investment, enabled by low operating and capital costs, high propylene yield and reliability, and maximum operating flexibility.

Since the technology was commercialized in 1990, Honeywell's UOP has commissioned nine C3 Oleflex units for on-purpose propylene production, with the 10th unit scheduled to start-up this year in Russia. This is the eighth C?3 Oleflex project Honeywell's UOP has announced since the beginning of 2011. Those projects, located in China, Abu Dhabi and North America, are expected to produce nearly 5 million metric tons of propylene in the next three years. There are currently five C4 Oleflex units in operation, producing nearly 2 million metric tons of isobutylene annually.

Shandong Chambroad Petrochemicals Co. Ltd. is a fully owned subsidiary of Shandong Chambroad Holding Co. Ltd and is headquartered in Binzhou City, Shandong Province, China.