Opportunities for Chemical Manufacturing Using Natural Gas Feedstocks in the San Juan Basin

Abstract

The San Juan Basin, located in northwestern New Mexico and southwestern Colorado, produces natural gas from oil, gas, and coalseam wells. Because of abundant natural gas supply and price discounts relative to other natural gas trading hubs, the San Juan Basin is an attractive location to establish greenfield manufacturing of value-added chemicals from locally produced natural gas. To assess the viability of manufacturing different types of chemicals, agent-based models of three chemical markets were created to simulate historical market operation in the United States. Using the agent-based models, potential market share of a greenfield plant in the San Juan Basin is estimated. The historical market models show that world-scale production of urea or polypropylene could be achieved by a manufacturing plant in the San Juan Basin. Production of propylene in the region likely could not sustain world-scale production, even with improvements in local transportation infrastructure connections.

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