Amendment No. 6
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

600 Travis Street, Suite 3250
Houston, TX 77002
(713) 255-5990
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

National Corporate Research, Ltd.
615 South DuPont Highway
Dover, DE 19901
(800) 483-1140
(Name, address, including zip code, and telephone number, including
area code, of agent for service)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities, and these securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

We are offering 1,500,000 common units and Propylene Holdings LLC, or the selling unitholder, is offering 33,500,000 common units representing limited partner interests. This is the initial public offering of our common units, and no public market currently exists for the common units. We currently anticipate that the initial public offering price for our common units will be between $19.00 and $21.00 per unit. We will not receive any proceeds from the sale of common units by Propylene Holdings LLC. Our common units have been approved for listing on the New York Stock Exchange under the symbol "PDH."

Investing in our common units involves risks. Please see "Risk Factors" beginning on page 19. These risks include the following:

Propylene Holdings LLC has granted the underwriters an option to purchase up to an additional 5,250,000 common units at the initial public offering price, less underwriting discounts and commissions, within 30 days from the date of this prospectus.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained in this prospectus. Neither we, nor the selling unitholder nor the underwriters have authorized anyone to provide you with additional or different information. If anyone provides you with additional, different or inconsistent information you should not

rely on it. Neither we, nor the selling unitholder nor the underwriters are making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume the information appearing in this prospectus is accurate as of the date on the front cover page of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: Neither we, nor the selling unitholder nor the underwriters have done anything that would permit this offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the common units and the distribution of this prospectus outside of the United States.

The data included in this prospectus regarding the propylene industry, including trends in the market and our position and the position of our competitors within the propylene production industry, is based on a variety of sources, including information provided by Chemical Data, L.P. ("Chemical Data") independent industry publications, government publications and other published independent sources, information obtained from customers, distributors, suppliers, trade and business organizations and publicly available information (including the reports and other information our competitors file with the Securities and Exchange Commission, which we did not participate in preparing and as to which we make no representation), as well as our good faith estimates, which have been derived from management's knowledge and experience in the areas in which our business operates. Estimates of market size and relative positions in a market are difficult to develop and inherently uncertain.

This summary highlights selected information contained elsewhere in this prospectus. You should carefully read the entire prospectus, including "Risk Factors" and the historical and unaudited pro forma consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. Unless otherwise indicated, the information in this prospectus assumes (1) an initial public offering price of $20.00 per common unit (the mid-point of the price range set forth on the cover page of this prospectus) and (2) that the underwriters do not exercise their option to purchase additional common units. References in this prospectus to "PetroLogistics LP," "we, "our," "us," our "predecessor" or similar terms when used in a historical context refer to PL Propylene LLC ("PL Propylene"), which has been contributed to us in contemplation of this offering. When used in the present tense or prospectively, those terms refer to PetroLogistics LP and its subsidiary unless the context otherwise requires or where otherwise indicated. References to "PL Manufacturing" refer to PL Manufacturing LLC, and references to the "PL Manufacturing Members" refer to our sponsors and their affiliates, our executive officers and certain employees of our general partner and of an affiliated company. References to our "general partner" refer to PetroLogistics GP LLC. References to "the selling unitholder" or "Propylene Holdings" refers to Propylene Holdings LLC, the owner of our general partner. References in this prospectus to our "sponsors" refer to Lindsay Goldberg LLC ("Lindsay Goldberg") and York Capital Management ("York Capital"), which, after the completion of this offering, will collectively and indirectly own 84% of our general partner and directly and indirectly own 63% of our common units. You should also see the "Glossary of Selected Terms" contained in Appendix B for definitions of some of the terms we use to describe our business and industry and other terms used in this prospectus.

We currently own and operate the world's largest propane dehydrogenation ("PDH") facility, based on production capacity, that processes propane into propylene. Propylene is one of the basic building blocks for petrochemicals that is utilized in the production of a variety of end uses including paints, coatings, building materials, clothing, automotive parts, packaging and a range of other consumer and industrial products. We are the only independent, dedicated "on-purpose" propylene producer in North America. We are strategically located in the vicinity of the Houston Ship Channel and within 50 miles of approximately one-half of all U.S. propylene consumption, and we have access to the leading global fractionation and storage hub for propane located at Mt. Belvieu, Texas. The Houston Ship Channel represents the heaviest concentration of petrochemical and refining complexes in the world and provides us with unparalleled access and connectivity to both customers and feedstock suppliers. Our newly-constructed facility has an annual production capacity of approximately 1.45 billion pounds of propylene. We commenced operations in October 2010 and, after an approximately year-long start-up and plant optimization phase, achieved production rates at or near current capacity beginning in December 2011.

Overall energy commodity price dynamics are expected to be favorable for our profitability. In particular, increased production from shale formations in North America has led to a decrease in natural gas prices, while continued robust demand for oil worldwide has resulted in high oil prices. Our profitability is enhanced by the high oil/low gas price environment in three ways. First, a significant portion of propylene production comes from ethylene manufacturing facilities (ethylene "crackers") using feedstocks derived from oil, or "heavy feeds," such as naphtha. The high oil price has caused such facilities to be less competitive than crackers using "light feeds" such as ethane, which produce little propylene. As a result, numerous heavy feed crackers in the U.S. have been shut down or reconfigured to use lighter feeds, thereby reducing the supply of propylene. Second, the increased production from shale formations has increased the supply of natural gas liquids such as ethane and propane that are extracted from natural gas, thus increasing the U.S. supply of propane, our sole feedstock. Third, while not perfectly correlated, the price of propylene is highly related to the price of crude oil, and the price of propane is related to the spread between the prices of crude oil and natural gas. Accordingly, a high oil/low gas price environment

leads to a wider propane-to-propylene spread and a higher gross margin for us. Chemical Data and management do not expect these dynamics to change in the near future.

Propane is our sole feedstock. Propane is a commodity produced by extraction and separation from natural gas production streams and as a by-product of refineries. We believe that, given our location, we have access to an abundant supply of propane from multiple sources. Our propane is currently supplied by Enterprise Products Operating LLC (together with its affiliates, "Enterprise") under a multi-year contract at market-based rates. We believe that ongoing investment by exploration and production market participants in the development of shale formations will continue to provide an abundant and growing supply of propane for the foreseeable future.

We currently have multi-year contracts for the sale of our propylene with The Dow Chemical Company ("Dow"), Total Petrochemicals USA, Inc. ("Total"), BASF Corporation ("BASF") and INEOS Olefins and Polymers USA ("INEOS") that expire between 2013 and 2018 and a one-year contract with LyondellBasell Industries N.V. ("LyondellBasell") that ends in December 2012. The contracts provide for minimum and maximum offtake volumes, with the minimum customer-contracted volumes representing approximately 75% of our current facility capacity and the maximum reflecting approximately 100% of our current facility capacity. Each of our customer contracts contain pricing terms based upon market rates. We also intend to opportunistically supply other propylene consumers on a spot basis when permitted by both operational and market conditions. Our pipeline system and interconnections provide us direct and indirect access to our contracted customers and spot buyers of propylene. Although we anticipate approximately 98% of our sales at full operating rates will be derived from propylene sales, we will also produce commercial amounts of hydrogen as well as a mixed stream of butane and butylenes ("C4 mix stream") and heavier hydrocarbons ("C5+ stream").

We intend to opportunistically pursue capacity expansion and other growth opportunities. In addition, we intend to evaluate and pursue acquisition and development opportunities complementary to our operating platform.

Based on preliminary data, we estimate that our production and average pricing for the quarter ended March 31, 2012, will be as follows:

Based on our forecast, we estimate that our production and average spread for the quarter ended June 30, 2012 will be as follows:

In April 2012, our facility experienced downtime for approximately six days, after which we successfully returned to planned production rates. The impact of this downtime has been reflected in our estimate of production for the quarter ended June 30, 2012.

Because our financial statements for the quarter ended March 31, 2012 and the quarter ending June 30, 2012 are not yet available, the estimates included above are preliminary, unaudited, not reviewed by our accountants, subject to completion, reflect our current best estimates and may be revised as a result of management's further review of our results. During the course of the preparation of our consolidated financial statements and related notes, we may identify items that would require us to make material adjustments to the preliminary financial information presented above.

Propylene is an important building block in the production of complex petrochemical derivatives such as polypropylene, acrylonitrile, acrylic acid, propylene oxide and oxo alcohols. These derivatives are ultimately processed further to make many different consumer and industrial products such as clothing, automotive components, building materials, detergents, safety glass, packaging materials, paints and nylon. In addition to its utility within the chemicals market, propylene also plays a significant role in the fuels market. When alkylated in a refinery, propylene is routinely used as a gasoline blendstock. Propylene demand has historically tracked GDP growth, and experienced the first worldwide contraction in history during the recession in 2008. Chemical Data forecasts that U.S. demand will grow at a compound annual growth rate of approximately 1.1% between 2011 and 2015.

There are three sources of propylene production in North America: crude oil refineries, ethylene manufacturing facilities and, to a much smaller extent, on-purpose facilities such as ours. Crude oil refineries produce propylene as a by-product of gasoline production. Ethylene crackers produce propylene as a co-product of ethylene production. Ethylene can be produced from many different feedstocks, including ethane, propane, butane, naphtha or gas oil. Although some ethylene facilities have feed flexibility, there are two general categories of crackers: those that use feedstocks derived from crude oil (such as naphtha), referred to as "heavy feed crackers," and those that use feedstocks derived from natural

gas (such as ethane), referred to as "light feed crackers." Heavy feed crackers produce propylene as a co-product in significant quantities, whereas light feed crackers produce very little propylene.

Within North America, increased production from shale formations has led to an abundance of natural gas liquids such as ethane and propane. Further, there has been a fundamental decoupling of natural gas and oil prices as gas prices have fallen dramatically while global economic and geopolitical factors have propelled oil prices to the $100 per barrel range. In the current high oil price/low natural gas price environment, heavy feed crackers generally have a cost disadvantage relative to light feed crackers. Numerous heavy feed crackers have been either permanently shut down or reconfigured to enable them to produce ethylene using ethane as a feedstock. As a result, propylene production from ethylene manufacturing facilities has declined dramatically from 15.5 billion pounds in 2007 to 11.4 billion pounds in 2011. Chemical Data estimates that 2 billion pounds of this reduction represents propylene supply removed from the market. Furthermore, refinery production of propylene in recent years has declined from 19.2 billion pounds in 2007 to 18.0 billion pounds in 2011 along with the general softness in gasoline demand and the increased use of ethanol. The result of these reductions has been a tight supply of propylene in the North American market at a time when demand is improving with the resumption of economic growth.

Chemical Data estimates that U.S. propylene supply will grow modestly from existing sources through 2015, increasing at a compound annual growth rate of approximately 0.3% from year-end 2011. This is primarily due to the belief that co-product supply of propylene from ethylene crackers is not likely to rebound in the near term with the expected continuation of the high oil price/low natural gas price environment. Furthermore, refinery output growth is expected to remain constrained due to modest growth in gasoline demand. These conditions suggest that the current very tight supply/demand dynamic affecting the propylene market is expected to persist for the foreseeable future.

As propane is our sole feedstock, and propylene is the primary product sold by our facility, our profitability is primarily determined by the difference in price between propane and propylene, the "propane-to-propylene spread." Like other commodities, the pricing for propylene and propane reflect supply and demand dynamics and are intricately related to the price movements of crude oil, natural gas and petrochemicals. The current dynamics affecting the price of these commodities, together with the tight

supply/demand environment for propylene discussed above, have led to the recent increase in the propane-to-propylene spread as illustrated in the graphic below:

For reasons more fully developed in the section of this prospectus entitled "Industry Overview," propylene generally prices at a premium to crude oil and propane trades at a discount to crude oil. Over the last decade, propylene has priced in a range of approximately 1.2 to 1.4 times the price of crude oil on an annual basis, except in the recession in 2008 and 2009 when it traded tighter. The recent short supply of propylene due to the factors described above has pushed this premium higher. Propane has historically traded at a discount to crude oil, and has declined over the last decade from approximately 85% of the price of crude in 2000 to approximately 55% in the year ended December 31, 2011 as the supply of propane from the shale gas developments has increased and the price of natural gas relative to the price of crude oil has declined. These factors, combined with the higher crude price, have led to the recent increase in the propane-to-propylene spread as illustrated in the above graphic. Because the propane-to-propylene spread is the primary driver of our gross margin, these trends are highly favorable to our profitability.

We are majority owned by Lindsay Goldberg and York Capital. Although the project development for our facility occurred over several years beginning in 2003, our predecessor was legally formed in 2007 to acquire the site of a former ethylene cracker from ExxonMobil and to develop this site into a PDH facility with the support of our sponsors. After the closing of this offering, Lindsay Goldberg will indirectly own 67% of our general partner and directly and indirectly own 50% of our common units, York Capital will indirectly own 17% of our general partner and directly and indirectly own 13% of our common units.

Lindsay Goldberg and York Capital have been instrumental in our management team's effort to implement the optimal operating and financial platform for the development of the PDH facility. Collectively, they will continue to own a majority of our common units upon completion of this offering and, therefore, will have a continuing incentive to support and promote the successful implementation of our business strategy.

The following charts provide a simplified overview of our organizational structure before and after giving effect to this offering and the transactions described under "The Transactions and our Structure and Organization," respectively:

Our principal executive offices are located at 600 Travis Street, Suite 3250, Houston, TX 77002 and our telephone number is (713) 255-5990. Upon completion of this offering, our website will be located at www.petrologistics.com and will be activated following the closing of this offering. We will make our periodic reports and other information filed with or furnished to the SEC, available free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.

An investment in our common units involves risks associated with our business, our partnership structure and the tax characteristics of our common units. These risks are described under "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements." You should carefully consider these risk factors together with all other information included in this prospectus.


Issuer		PetroLogistics LP, a Delaware limited partnership.
Common Units Offered to the Public by Us		1,500,000 common units.
Common Units Offered to the Public by the Selling Unitholder		33,500,000 common units.
Option to Purchase Additional Common Units from the Selling Unitholder		If the underwriters exercise their option to purchase additional common units in full, the selling unitholder will sell an additional 5,250,000 common units to the public.
Units Outstanding After this Offering		139,000,000 common units. If the underwriters do not exercise their option to purchase additional common units, the selling unitholder will distribute 102,625,000 common units to PL Manufacturing upon the option's expiration, of which 97,493,750 common units will be distributed to the PL Manufacturing Members. If, and to the extent, the underwriters exercise their option to purchase additional common units, the selling unitholder will sell the number of common units purchased by the underwriters pursuant to such exercise and the remainder, if any, will be distributed to the PL Manufacturing Members or retained by PL Manufacturing. Accordingly, the exercise of the underwriters' option will not affect the total number of common units outstanding. For a detailed description of these transactions, see "The Transactions and Our Structure and Organization."
		In addition, our general partner will own a general partner interest in us which will not entitle it to receive quarterly distributions.
Use of Proceeds		We estimate that the net proceeds to us from our sale of 1,500,000 common units in this offering, after deducting underwriting discounts and commissions and the estimated expenses of this offering, will be approximately $23.3 million (based on an assumed initial public offering price of $20.00 per common unit, the mid-point of the price range set forth on the cover page of this prospectus). We will use the proceeds we receive from this offering for working capital and general partnership purposes, for funding certain future capital expenditures at our facility, including a portion of those associated with our planned major maintenance project in 2013 to replace the reactor catalyst, and for funding a portion of the distributions to our common unitholders for the lost margin resulting therefrom.
		We will not receive any proceeds from the sale of common units by the selling unitholder in this offering, including proceeds from the sale of additional common units by the selling unitholder pursuant to the underwriters' option to purchase additional common units.


Cash Distributions		Within 45 days after the end of each quarter, beginning with the quarter ending June 30, 2012, we expect to make quarterly cash distributions to unitholders of record on the applicable record date. We expect our first quarterly distribution will include available cash (as described below) for the period from the closing of this offering through June 30, 2012.
		The board of directors of our general partner will adopt a policy pursuant to which we will distribute all of the available cash we generate each quarter. Available cash for each quarter will be determined by the board of directors of our general partner following the end of such quarter. We expect that available cash for each quarter will generally equal our cash flow from operations for the quarter, less cash needed for capital expenditures, debt service and other contractual obligations, reserves for future operating or capital needs that the board of directors of our general partner deems necessary or appropriate and reserves to fund quarterly distributions to our unitholders during future periods of decreased production associated with planned maintenance turnarounds. Available cash will be calculated after giving pro forma effect to any contributions received (or to be received), if any, by us and any special distributions paid (or to be paid) by us under the omnibus agreement that we will enter into contemporaneously with the closing of this offering.
		A decision by the board of directors of our general partner to hold cash reserves as described above may have an adverse impact on the available cash in the quarter in which the reserves are withheld and a corresponding mitigating impact on the future quarter(s) in which the reserves are utilized.
		Except in connection with our triennial maintenance projects, we do not intend to maintain excess distribution coverage for the purpose of maintaining stability or growth in our quarterly distribution. We do not intend to incur debt to pay quarterly distributions. We expect to finance substantially all of our growth externally, either by debt issuances or additional issuances of equity.
		Because our policy will be to distribute all the available cash we generate each quarter, as described above, our unitholders will have direct exposure to fluctuations in the amount of cash generated by our business. We expect that the amount of our quarterly distributions, if any, will vary based on our operating cash flow during such quarter. Though such variations will be mitigated in respect of periods of planned maintenance downtime by the application of cash reserves, our quarterly cash distributions, if any, will generally not be stable and will vary from quarter to quarter as a direct result of variations in our operating performance and cash flows caused by fluctuations in the prices of propane and propylene. Such variations in the amount of our quarterly distributions may be significant. Unlike most publicly traded partnerships, we will not have a


		minimum quarterly distribution or employ structures intended to consistently maintain or increase quarterly distributions over time. The board of directors of our general partner may change our distribution policy at any time. Our partnership agreement does not require us to pay cash distributions to our unitholders on a quarterly or other basis.
		Based upon our forecast for the twelve months ending June 30, 2013, assuming the board of directors of our general partner declares distributions in accordance with our cash distribution policy, we expect that our aggregate quarterly distributions for the twelve months ending June 30, 2013 will be approximately $305.7 million, or $2.20 per common unit. See "Our Cash Distribution Policy and Restrictions on Distributions—Forecasted Available Cash." Unanticipated events may occur which could materially adversely affect the actual results we achieve during the forecast period.
		Consequently, our actual results of operations, cash flows, financial condition and our need for cash reserves during the forecast period may vary from the forecast, and such variations may be material. Prospective investors are cautioned not to place undue reliance on our forecast and should make their own independent assessment of our future results of operations, cash flows and financial condition. In addition, the board of directors of our general partner may be required to, or elect to, eliminate our distributions at any time during periods of reduced prices or demand for our propylene, among other reasons. Please see "Risk Factors."
		We have a limited operating history upon which to rely in evaluating whether we will have sufficient cash to allow us to pay distributions on our common units. Our PDH facility did not generate sales until the commencement of commercial operations in October 2010, and we did not achieve daily production rates sufficient to generate available cash for distribution to unitholders until April 2011. Furthermore, because of industry conditions and a planned outage lasting 25 days, we would not have generated sufficient cash to pay a quarterly distribution for the fourth quarter of 2011. See "Risk Factors—We have a limited operating history during which we experienced planned and unplanned downtime. As a result, you may have difficulty evaluating our ability to pay quarterly cash distributions to our unitholders or our ability to be successful in implementing our business strategy."
Incentive Distribution Rights		None.
Subordination Period		None.


Issuance of Additional Units		Our partnership agreement authorizes us to issue an unlimited number of additional units, including units with rights to distributions or in liquidation that are senior to our common units, and rights to buy units for the consideration and on the terms and conditions determined by the board of directors of our general partner without the approval of our unitholders. See "Common Units Eligible for Future Sale" and "The Partnership Agreement—Issuance of Additional Partnership Interests."
Limited Voting Rights		Our general partner manages and operates us. Unlike the holders of common stock in a corporation, you will have only limited voting rights on matters affecting our business. You will have no right to elect our general partner or our general partner's directors on an annual or other continuing basis. Our general partner may be removed by a vote of the holders of at least 66²/3% of the outstanding common units, including any common units owned by our general partner and its affiliates (including our sponsors). Upon the completion of this offering our sponsors will directly and indirectly own an aggregate of approximately 63% of our outstanding common units (approximately 59% if the underwriters exercise their option to purchase additional common units from the selling unitholder in full). This will give our sponsors the ability to prevent removal of our general partner. See "The Partnership Agreement—Voting Rights."
Call Right		If at any time our general partner and its affiliates (including our sponsors) own more than 80% of the common units, our general partner will have the right, but not the obligation, to purchase all, but not less than all, of the common units held by public unitholders at a price not less than their then-current market price, as calculated pursuant to the terms of our Partnership Agreement. See "The Partnership Agreement—Call Right."
Estimated Ratio of Taxable Income to Distributions		We estimate that if you own the common units you purchase in this offering through the record date for distributions for the twelve months ending December 31, 2014, you will be allocated, on a cumulative basis, an amount of U.S. federal taxable income for that period that will be 20% or less of the cash distributed to you with respect to that period. See "Material U.S. Federal Income Tax Consequences—Tax Consequences of Unit Ownership—Ratio of Taxable Income to Distributions."
Material U.S. Federal Income Tax Consequences		Subject to the discussion under "Material U.S. Federal Income Tax Consequences—Taxation of the Partnership—Partnership Status" and the limitations set forth therein, it is the opinion of Vinson & Elkins L.L.P. that we will be treated as a partnership for U.S. federal income tax purposes. As a result, we generally will not be liable for U.S. federal income taxes. Instead, each of our


		unitholders will take into account its share of our income, gains, losses and deductions in computing its U.S. federal income tax liability as if it had earned such income directly, even if we do not make cash distributions to that unitholder. Consequently, a unitholder may be liable for U.S. federal income taxes as a result of ownership of our units even if that unitholder has not received a cash distribution from us. Cash distributions by us to a unitholder generally will not give rise to income or gain.
		For a discussion of the material U.S. federal income tax consequences that may be relevant to prospective unitholders, you should read "Material U.S. Federal Income Tax Consequences."
Exchange Listing		Our common units have been approved for listing on the New York Stock Exchange ("NYSE") under the symbol "PDH."
Risk Factors		See "Risk Factors" beginning on page 19 of this prospectus for a discussion of factors that you should carefully consider before deciding to invest in our common units.

The summary historical financial information presented below under the caption Statement of Operations Data for each of the four years in the period ended December 31, 2011, and the summary historical financial information presented below under the caption Balance Sheet Data as of December 31, 2011, 2010, 2009 and 2008, have been derived from the audited financial statements of our predecessor, PL Propylene, included elsewhere in this prospectus. Our predecessor was formed in January 2007 and acquired the site where our PDH facility is located in March 2008. We commenced operations in October 2010 and, after an approximately year-long start-up and plant optimization phase, achieved production rates at or near current capacity beginning in December 2011.

The summary unaudited pro forma consolidated financial information presented below under the caption Statement of Operations Data for the year ended December 31, 2011, and the summary unaudited pro forma consolidated financial information presented below under the caption Balance Sheet Data as of December 31, 2011, have been derived from our unaudited pro forma consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma consolidated statement of operations data for the year ended December 31, 2011, was prepared based on the assumption that we were in existence as a separate entity throughout that period and that the transactions described below occurred on January 1, 2011:

The unaudited pro forma consolidated balance sheet as of December 31, 2011, was prepared based on the assumption that the Transactions (as defined on page 45) occurred on December 31, 2011. The unaudited pro forma consolidated financial data is not comparable to our historical financial data. A more complete explanation of the unaudited pro forma consolidated data can be found in our unaudited pro forma consolidated financial statements and accompanying notes included elsewhere in this prospectus.

The historical data presented below has been derived from financial statements that have been prepared using accounting principles generally accepted in the United States, or GAAP, and the unaudited pro forma consolidated data presented below has been derived from the "Unaudited Pro Forma Consolidated Financial Statements" included elsewhere in this prospectus. This data should be read in conjunction with, and is qualified in its entirety by reference to, the financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

	Historical												Unaudited Pro Forma Consolidated

	Year Ended December 31,
	Year Ended December 31,												Year Ended December 31, 2011
	2011			2010			2009			2008			Year Ended December 31, 2011
	(dollars in millions, except per unit data and as otherwise indicated)
Statement of Operations Data:
Sales	$	614.9		$	30.4		$	—		$	—		$	614.9
Cost of sales		496.8			41.9			—			—			496.8
General and administrative expense		73.3			22.9			4.3			4.7			73.3
Management fee		2.0			—			—			—			—
Loss on derivatives		1.7			—			—			—			1.7

Operating income (loss)		41.1			(34.4	)		(4.3	)		(4.7	)		43.1
Interest income (expense), net		(17.9	)		(5.4	)		(0.2	)		0.7			(28.9	)
Other income		0.1			0.1			—			—			0.1

Net income (loss) before income tax expense	$	23.3		$	(39.7	)	$	(4.5	)	$	(4.0	)	$	14.3
Income tax expense		(1.4	)		—			—			—			(1.4	)

Net income (loss)	$	21.9		$	(39.7	)	$	(4.5	)	$	(4.0	)	$	12.9

Pro forma net income per common unit, basic and diluted													$	.09
Pro forma number of common units, basic and diluted in millions														139.0
Balance Sheet Data:
Cash (including restricted cash balances)	$	45.8		$	6.9		$	30.0		$	71.8		$	47.3
Working capital⁽¹⁾		64.0			16.0			9.9			61.4			64.7
Total assets		741.5			668.9			484.6			214.1			743.0
Total debt, net of discount (including current portion)		145.1			189.5			94.7			—			343.0
Member's equity		544.8			456.1			365.5			202.9			351.3
Financial and Other Data:
Cash flows provided by (used in) operating activities	$	84.6		$	(53.2	)	$	—		$	(1.0	)
Cash flows used in investing activities		(28.5	)		(157.4	)		(281.2	)		(170.0	)
Cash flows provided by (used in) financing activities		(56.1	)		210.7			249.1			203.0
Adjusted EBITDA⁽²⁾		144.8			(12.6	)		(3.6	)		(2.0	)		146.8
Capital expenditures		28.5			187.5			291.0			130.2
Key Operating Data:
Production volume (thousand pounds, unless otherwise noted):
Propylene		844,608			76,522			—			—
Hydrogen (thousand standard cubic feet, MSCF)		3,802,923			—			—			—
C4 mix/C5+ streams		17,302			247			—			—

		Historical											Unaudited Pro Forma Consolidated

		Year Ended December 31,
		Year Ended December 31,											Year Ended December 31, 2011
		2011		2010			2009			2008			Year Ended December 31, 2011
		(dollars in millions)
Reconciliation of Net income (loss) to Adjusted EBITDA:
Net income (loss)		$	21.9	$	(39.7	)	$	(4.5	)	$	(4.0	)	$	12.9
Plus:
	Interest expense and amortization of deferred financing costs		17.9		5.4			0.8			—			28.9
	Income tax expense		1.4		—			—			—			1.4
	Depreciation, amortization and accretion		37.5		7.2			0.1			—			37.5
	Equity-based compensation expense		64.4		14.5			—			2.0			64.4
	Unrealized loss on derivatives		1.7		—			—			—			1.7

	Adjusted EBITDA	$	144.8	$	(12.6	)	$	(3.6	)	$	(2.0	)	$	146.8

You should carefully consider each of the following risks and all of the information set forth in this prospectus before deciding to invest in our common units. If any of the following risks and uncertainties develops into an actual event, our business, financial condition, cash flows and results of operations could be materially adversely affected. In that case, we might not be able to pay distributions on our common units, the trading price of our common units could decline materially, and you could lose all or part of your investment. Although many of our business risks are comparable to those faced by a corporation engaged in a similar business, limited partner interests are inherently different from the capital stock of a corporation and involve additional risks described below.

We may not have sufficient available cash to pay any quarterly distribution on our common units.

We may not have sufficient available cash each quarter to enable us to pay any distributions to our common unitholders. Our PDH facility did not generate sales until the commencement of commercial operations in October 2010, and we did not achieve daily production rates sufficient to generate available cash for distributions to our unitholders for periods prior to April 2011. Furthermore, because of industry conditions and a planned outage lasting 25 days, we would not have generated sufficient cash to pay a distribution for the fourth quarter of 2011. The amount of cash we will be able to distribute on our common units principally depends on the amount of cash we generate from our operations, which is primarily dependent upon the operating margins we generate. Our operating margins, and thus, the cash we generate from operations have been volatile, and we expect that they will fluctuate from quarter to quarter based on, among other things:

In addition, the actual amount of cash we will have available for distribution will depend on other factors, some of which are beyond our control, including:

Our partnership agreement will not require us to pay a minimum quarterly distribution. The amount of distributions that we pay, if any, and the decision to pay any distribution at all, will be determined by the board of directors of our general partner. Our quarterly distributions, if any, will be subject to significant fluctuations based on the above factors.

For a description of additional restrictions and factors that may affect our ability to pay distributions, see "Our Cash Distribution Policy and Restrictions on Distributions."

The amount of our quarterly cash distributions, if any, will vary significantly both quarterly and annually and will be directly dependent on the performance of our business. Unlike most publicly traded partnerships, we will not have a minimum quarterly distribution or employ structures intended to consistently maintain or increase distributions over time.

Investors who are looking for an investment that will pay predictable quarterly distributions should not invest in our common units. We expect our business performance will be more cyclical and volatile, and our cash flows will be less stable, than the business performance and cash flows of most publicly traded partnerships. As a result, our quarterly cash distributions will be cyclical and volatile and are expected to vary quarterly and annually. Unlike most publicly traded partnerships, we will not have a minimum quarterly distribution or employ structures intended to consistently maintain or increase distributions over time. The amount of our quarterly cash distributions will be directly dependent on the performance of our business, which will be volatile as a result of fluctuations in propane and propylene prices and the demand for propylene products. Because our quarterly distributions will be subject to significant fluctuations directly related to the cash we generate after payment of our fixed and variable expenses and other cash reserves established by our general partner, future quarterly distributions paid to our unitholders will vary significantly from quarter to quarter and may be zero. Given the cyclical and volatile nature of our business, we expect that our unitholders will have direct exposure to fluctuations in the price of propylene and the cost of propane.

The amount of cash we have available for distribution to unitholders depends primarily on our cash flow and not solely on profitability.

You should be aware that the amount of cash we have available for distribution depends primarily upon our cash flow and not solely on profitability, which may be affected by non-cash items. For example, we may have extraordinary capital expenditures and major maintenance expenses in the future. See "Management's Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources—Capital Spending." As a result, we may make cash distributions during periods when we report losses and may not make cash distributions during periods when we report net income.

For the twelve months ended December 31, 2011, on a pro forma basis, we would not have generated sufficient available cash to have paid the per unit quarterly distribution that we project that we will be able to pay for the twelve months ending June 30, 2013.

We project that we will be able to pay aggregate quarterly distributions of $2.20 per unit for the twelve months ending June 30, 2013. In order to pay these projected distributions, we must generate approximately $305.7 million of available cash in the twelve months ending June 30, 2013. We have a limited operating history upon which to rely in evaluating whether we will have sufficient cash to allow us to pay quarterly distributions on our common units. Our PDH facility did not generate sales until the commencement of commercial operations in October 2010, and we did not achieve daily production rates sufficient to generate available cash for quarterly distribution to our unitholders until April 2011. Furthermore, because of industry conditions and a planned outage lasting 25 days, we would not have generated sufficient cash to pay a distribution for the fourth quarter of 2011. For a description of the price assumptions upon which we have based our projected per unit quarterly distributions during the twelve

months ending June 30, 2013, see "Our Cash Distribution Policy and Restrictions on Distributions—Assumptions and Considerations."

The board of directors of our general partner may modify or revoke our cash distribution policy at any time at its discretion. Our partnership agreement does not require us to pay any distributions at all.

The board of directors of our general partner will adopt a cash distribution policy pursuant to which we will distribute all of the available cash we generate each quarter to unitholders of record on a pro rata basis. However, the board may change such policy at any time at its discretion and could elect not to pay distributions for one or more quarters. See "Our Cash Distribution Policy and Restrictions on Distributions."

Our partnership agreement does not require us to pay any distributions at all. Accordingly, investors are cautioned not to place undue reliance on the permanence of such a policy in making an investment decision. Any modification or revocation of our cash distribution policy could substantially reduce or eliminate the amounts of distributions to our unitholders. The amount of distributions we make, if any, and the decision to make any distribution at all will be determined by the board of directors of our general partner, whose interests may differ from those of our common unitholders. Our general partner has limited fiduciary and contractual duties, which may permit it to favor its own interests or the interests of Propylene Holdings to the detriment of our common unitholders.

None of the proceeds from the sale of common units by the selling unitholder in this offering will be available to fund our operations or to pay distributions.

We will not receive any proceeds from the sale of common units by the selling unitholder in this offering. Consequently, none of the proceeds from such sale will be available to fund our operations or to pay distributions to the public unitholders. See "Use of Proceeds."

The assumptions underlying the forecast of available cash that we include in "Our Cash Distribution Policy and Restrictions on Distributions—Forecasted Available Cash" are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those forecasted.

Our forecast of available cash set forth in "Our Cash Distribution Policy and Restrictions on Distributions—Forecasted Available Cash" includes our forecast of our results of operations and available cash for the twelve months ending June 30, 2013. The forecast has been prepared by our management team. Neither our independent registered public accounting firm nor any other independent accountants have examined, compiled or performed any procedures with respect to the forecast, nor have any of them expressed any opinion or any other form of assurance on such information or its achievability, and they assume no responsibility for the forecast. The assumptions underlying the forecast are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks and uncertainties, including those discussed in this section, that could cause actual results to differ materially from those forecasted. If the forecasted results are not achieved, we would not be able to pay the forecasted distribution amounts, in which event the market price of the common units may decline materially. Our actual results may differ materially from the forecasted results presented in this prospectus. Investors should review the forecast of our results of operations for the twelve months ending June 30, 2013 together with the other information included elsewhere in this prospectus, including "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

The propylene business is, and propylene prices are, cyclical and highly volatile and have experienced substantial downturns in the past. Cycles in demand and pricing could potentially expose us to significant fluctuations in our operating and financial results, and expose you to substantial volatility in our quarterly cash distributions and material reductions in the trading price of our common units.

We are exposed to fluctuations in propylene demand and supply in the petrochemical industry. These fluctuations historically have had and could in the future have significant effects on prices and, in turn, significant effects on our financial condition, cash flows and results of operations, which could result in significant volatility or material adverse effects in the price of our common units or our ability to make quarterly cash distributions on our common units. For example, propylene prices fell significantly in the fourth quarter of 2011, which adversely affected our cash flows and results of operations.

Propylene is a commodity, and its price can be cyclical and highly volatile. The price of propylene depends on a number of factors, including the price of crude oil and other commodities, general economic conditions, cyclical trends in end-user markets and supply and demand imbalances.

Demand for propylene is dependent on demand for petrochemicals by the global construction, automotive and housing industries. Propylene supply is affected by available capacity and operating rates, raw material costs, government policies and global trade. For example, an increase in the OPEC production quota may cause crude oil prices to decline and, therefore, potentially increase the supply of propylene and reduce propylene prices. A decrease in propylene prices would have a material adverse effect on our business, cash flow and ability to make quarterly distributions. If propylene prices fall below a certain level, we may not generate sufficient sales to operate profitably or cover our costs and our ability to make quarterly distributions will be materially adversely affected.

Our results of operations, financial condition and ability to make cash distributions to our unitholders may be adversely affected by the supply and price levels of propane.

The sole feedstock used in our production is propane. The price of propane is correlated to the price of crude oil and is influenced by the price of natural gas. The prices for crude oil and natural gas are cyclical and volatile, and as a result, the price of propane can be cyclical and volatile. The cost of propane represents a substantial portion of our cost of sales. If propane costs increase, the market price of propylene may not rise correspondingly or at all. Timing differences between propane prices, which may change daily, and the market price of propylene, which is set monthly, may narrow the propane-to-propylene spread and thus reduce our cash flow, which reduction could be material. Based on our current output, we obtain all of the propane we need from Enterprise through its propane pipeline system, which is connected to the natural gas liquids and refined products storage hub at Mt. Belvieu. The price that we pay Enterprise for propane fluctuates based on market prices. Propane prices could significantly increase in the future. Should Enterprise fail to perform in accordance with our existing agreement, we would need to purchase propane from third parties on the open market, which could negatively impact our results of operations to the extent third-party propane is unavailable or available only at higher prices.

Significant price volatility or interruptions in supply of other raw materials, such as natural gas, electricity and nitrogen, may result in increased costs that we may be unable to pass on to our customers, which could reduce our profitability.

The raw materials we consume, such as natural gas, electricity and nitrogen, are generally commodity products that are readily available at market prices. We frequently enter into supply agreements with particular suppliers, but disruptions of existing supply arrangements could substantially impact our profitability. If certain of our suppliers are unable to meet their obligations under present supply agreements, we may be forced to pay higher prices to obtain the necessary materials from other sources. In addition, if any of the raw materials that we use become unavailable within the geographic area from which they are now sourced, then we may not be able to obtain suitable or cost effective substitutes. Any

interruption in the supply of raw materials will increase our costs or decrease our sales, which will reduce our cash flow.

Our supply agreements typically provide for market-based pricing and provide us no protection against price volatility. If the cost of any of our raw materials rises, the market price of propylene may not rise correspondingly or at all. Timing differences between raw material prices, which may change daily, and the market price of propylene, which is set monthly, may have a negative effect on our cash flow. Any cost increase could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Our operations are dependent on third-party suppliers, including Enterprise, which owns the propane pipeline that provides propane to our facility. A deterioration in the financial condition of a third-party supplier, a mechanical problem with one of their facilities or the inability of a third-party supplier to perform in accordance with its contractual obligations could have a material adverse effect on our results of operations, financial condition and our ability to make cash distributions to our unitholders.

Our operations depend in large part on the performance of third-party suppliers, including Enterprise for the supply of propane, a subsidiary of Kinder Morgan Energy Partners, L.P. ("Kinder Morgan") for the supply of natural gas and Praxair, Inc. ("Praxair") for the supply of nitrogen. Should Enterprise, Kinder Morgan, Praxair or any of our other third-party suppliers fail to perform in accordance with existing contractual arrangements, our operation could be forced to halt. Alternative sources of supply could be difficult to obtain. Any shutdown of our operations, even for a limited period, could have a material adverse effect on our results of operations, financial condition and ability to make cash distributions to our unitholders. In particular, our operations could be adversely affected if there were a deterioration in Enterprise's financial condition such that the operation of the propane delivery system connected to our facility was disrupted.

Our facility faces operating hazards and interruptions, including planned and unplanned maintenance or downtime. We could face potentially significant costs to the extent these hazards or interruptions cause a material decline in production.

Our operations, located at a single location, are subject to significant operating hazards and interruptions. Any significant curtailing of production at our PDH facility or individual units within our facility could result in materially lower levels of sales and cash flow for the duration of any shutdown and materially adversely impact our ability to make cash distributions to our unitholders. Operations at our PDH facility could be curtailed or partially or completely shut down, temporarily or permanently, as the result of a number of circumstances, most of which are not within our control. For example, in June 2011, our facility experienced a mechanical failure in one of our compressors. We took our facility offline for approximately four weeks while we repaired the compressor and completed other capital and maintenance projects. Furthermore, in October 2011, we undertook a planned outage that lasted 25 days, during which we expanded the capacity of our facility and completed other capital and maintenance projects. In April 2012, our facility experienced downtime for approximately six days to undertake a minor maintenance project. Other scenarios that could result in a shut down of our facility include:

The magnitude of the effect on us of any shutdown will depend on the length of the shutdown and the extent of the facility operations affected by the shutdown. Our facility requires a planned maintenance turnaround every three years, which generally lasts up to four weeks and may have a material impact on our cash flows and ability to make cash distributions in the quarter or quarters in which it occurs. During planned maintenance turnaround times, if we elect to undertake extraordinary maintenance, our downtime may be substantially longer. In addition to the triennial maintenance projects, a more significant maintenance project will be undertaken approximately every nine years. We anticipate each of these projects to take approximately six weeks. A major accident, fire, flood or other event could damage our facility or the environment and the surrounding community or result in injuries or loss of life. Planned and unplanned maintenance could reduce our net income, cash flow and ability to make cash distributions during the period of time that any of our units is not operating. Any planned and unplanned future downtime could have a material adverse effect on our ability to make cash distributions to our unitholders.

For example, in the quarter(s) preceding our triennial planned outages for major maintenance associated with the change-out of our reactor catalyst as described elsewhere in this prospectus, the board of directors of our general partner may elect to reserve amounts to fund (i) the capital costs associated with the change-out of our reactor catalyst, (ii) all or a portion of the revenues projected to be forgone as a result of the loss of production during the downtime associated with the outage or (iii) both. Based upon the decision(s) made by the board of directors of our general partner, the cash available for distribution in the quarter(s) preceding such a planned maintenance event in which the reserves are withheld may be adversely impacted. Conversely, additional amounts may be required to be reserved from available cash generated in a quarter subsequent to such a planned maintenance event should the scope of the actual work performed during such period be materially different than that planned.

Our customer contracts provide for potential maximum offtake volumes of approximately 1.454 billion pounds of propylene per year. Our PDH facility first exhibited the ability to perform at this operating rate after the conclusion of a planned outage in October and November 2011. Due to a variety of reasons—constraints on the Shell pipeline system due to a fire at a natural gas liquids refining facility in Mont Belvieu in February 2011, variances in volume nominations by our customers, and, to a much smaller degree, select plant operating issues—we have not shown the ability to operate at this offtake level for a prolonged period of time. To the extent that our supply obligations under our customer contracts exceed the volume that we can produce, we may need to purchase propylene from third parties in the spot market. In periods of extended planned or unplanned downtime, we may be required to purchase significant volumes of propylene in order to satisfy our contractual obligations, which could materially and adversely affect our profitability and our ability to make cash distributions to our unitholders. Further, if we were unable to purchase the volumes of propylene necessary to satisfy our contractual obligations, we may be in default of our customer contracts.

We are not fully insured against all risks incident to our business, and if an accident or event occurs that is not fully insured it could adversely affect our business.

A major accident, fire, flood or other event could damage our facility or the environment and the surrounding community or result in injuries or loss of life. If we experience significant property damage, business interruption, environmental claims or other liabilities, our business could be materially adversely affected to the extent the damages or claims exceed the amount of valid and collectible insurance available to us. We are currently insured under property, business interruption, general liability (including sudden and accidental pollution liability), business automobile, workers compensation and excess liability insurance policies. The property and business interruption insurance policies have a $750.0 million single

occurrence limit with a $1.0 million deductible for physical damage and a 60-day waiting period before losses resulting from business interruptions are recoverable. The policies also contain exclusions and conditions that could have a materially adverse impact on our ability to receive indemnification thereunder, as well as customary sub-limits for particular types of losses. For example, the current property policy contains specific sub-limits of $400.0 million for damage caused by flooding and $100.0 million for damage caused by named windstorms, with deductibles of $1.0 million and $5.0 million per occurrence, respectively. We are fully exposed to all losses in excess of the applicable limits and sub-limits and for losses due to business interruptions of fewer than 60 days. The occurrence of any operating risk not covered by our insurance could have a material adverse effect on our business, financial condition, results of operations and ability to pay distributions to our unitholders. Our general liability insurance policy, which includes sudden and accidental pollution coverage expires on March 1, 2013, and our property and business interruption insurance policies expire on May 1, 2012. Market factors, including but not limited to catastrophic perils that impact our industry, significant changes in the investment returns of insurance companies, insurance company solvency trends and industry loss ratios and loss trends, can negatively impact the future cost and availability of insurance. There can be no assurance that we will be able to buy and maintain insurance in the future with adequate limits, reasonable pricing terms and conditions.

We have a limited operating history during which we have experienced both planned and unplanned downtime. As a result, you may have difficulty evaluating our ability to pay quarterly cash distributions to our unitholders or our ability to be successful in implementing our business strategy.

We are dependent on our PDH facility as our sole source of propylene and by-products to generate sales, and we are, therefore, dependent on the continued operation of this PDH facility to generate our sales. As a newly constructed complex processing facility and the largest of only four CATOFIN processing facilities that produce propylene, the operating performance of our facility over the short-term and long-term is not yet proven. We have already encountered and will continue to encounter risks and difficulties frequently experienced by companies whose performance is dependent upon newly constructed world-scale processing or manufacturing facilities, such as the risks described in this prospectus.

Our PDH facility did not generate sales until the commencement of commercial operations in October 2010, and we did not achieve daily production rates at our current capacity until December 2011, after an approximately year-long start-up and plant optimization phase. During this period we experienced both planned and unplanned downtime. For example, in June 2011, our facility experienced a mechanical failure in one of our compressors. We took our facility offline for approximately four weeks while we repaired the compressor and completed other capital and maintenance projects. Furthermore, in October 2011, we undertook a planned outage that lasted 25 days, during which we expanded the capacity of our facility and completed other capital and maintenance projects.

Because of our limited operating history and performance record, it is difficult for you to evaluate our business and results of operations to date and to assess our future prospects. Further, our historical financial statements present a period of limited operations, and therefore do not provide a meaningful basis for you to evaluate our operations or our ability to achieve our business strategy. We may be less successful than a seasoned company in achieving a consistent operating level at our facility capable of generating cash flows from our operations sufficient to regularly pay a quarterly cash distribution or to pay any quarterly cash distribution to our unitholders. We may also be less successful in implementing our business strategy than a seasoned company with a longer operating history. Finally, we may be less equipped to identify and address operating risks and hazards in the conduct of our business than those companies whose major facilities have longer operating histories.

Management estimates over 30 different companies produce propylene in North America. We consider companies with net long positions in PGP and CGP to be our direct competitors, including

Enterprise, Chevron Phillips, ExxonMobil Chemical, Shell Chemical, Flint Hills and the Williams Companies. Most of our competitors have significantly greater financial and other resources than us and are engaged on a national or international basis in many segments of the petroleum products and petrochemicals business, including refining, transportation and marketing, on a scale substantially larger than ours. In addition, we may face competition from captive propylene production facilities operated by consumers of propylene. For example, Dow recently announced a plan to build its own on-purpose propane dehydrogenation propylene facility for start-up in 2015. Dow also announced that it is considering building a second propylene facility with a possible start-up date in 2018. As a result of these factors, we may be unable to expand our relationships with existing customers or to obtain new customers on a profitable basis, or at all, which would have a material adverse effect on our business, results of operations and financial condition and our ability to pay cash distributions to our unitholders.

We depend on certain third-party pipelines to supply us with feedstock and to distribute propylene to our customers. If these pipelines become unavailable to us, our business could be adversely affected.

Our ability to obtain propane and other inputs necessary for the production of propylene is dependent upon the availability of third-party pipeline systems interconnected to our PDH facility. In addition, we depend on third-party pipeline systems to transport propylene to our customers. Because we do not own these pipelines, their continuing operation is not within our control. These pipelines may become unavailable for a number of reasons, including testing, maintenance, capacity constraints, accidents, government regulation or other events. If third-party pipelines become partially or completely unavailable, our ability to operate could be restricted and our transportation costs could increase, thereby reducing our profitability. A prolonged or permanent interruption in the availability of third-party pipelines could have a material adverse effect on our business, financial condition, results of operations and ability to pay distributions to our unitholders.

The growth in production of natural gas from shale formations, which is expected to lead to an abundant supply of propane, may not continue at projected rates due to the uncertainty associated with the length of their production lives, legislative initiatives restricting such production, or both.

Hydraulic fracturing is a process used by oil and natural gas exploration and production operators in the completion of certain oil and natural gas wells whereby water, sand and chemicals are injected under pressure into subsurface formations to stimulate natural gas production. The proliferation of hydraulic fracturing has led to a marked growth in production of natural gas and the resulting abundance of natural gas has led to a decrease in price. However, production of gas from shale formations is in its nascence, and certain industry reports have indicated that the wells may have shorter economically-viable production lives than previously anticipated. If such reports are accurate, shale gas development and production may be negatively impacted which may lead to substantial increases in natural gas prices.

Although hydraulic fracturing has been used for decades in connection with conventional or vertical wells, its use has expanded substantially in recent years as the application of hydraulic fracturing on horizontal wells drilled to produce from shale formations has expanded substantially. This expanded use of hydraulic fracturing has recently attracted increased scrutiny from federal and state officials for its potential impact on health and the environment. Adoption of legislation or any implementation of regulations placing restrictions on hydraulic fracturing activities could make it more difficult to perform hydraulic fracturing, resulting in a reduction in the supply of natural gas and an increase in the price of natural gas.

An increase in the price of natural gas could narrow the propane-to-propylene spread in two ways, each adversely affecting our gross margins. First, a significant increase in natural gas prices could cause ethylene producers to determine that the use of naphtha as a feedstock is more economical than natural gas based feedstocks such as ethane. Because the use of naphtha as a feedstock in the ethylene production process results in significantly more propylene as co-product than ethane, the result would be an increase

in propylene production by ethylene plants. The increased supply of propylene would in turn exert downward pressure on the price of propylene, adversely affecting the price we obtain for the propylene we produce, both in the spot market and pursuant to our customer contracts, which are market-based. Second, an increase in the price of natural gas may be accompanied by an increase in the price of propane, as the majority of propane is derived from natural gas production, thereby further narrowing the propane-to-propylene spread and reducing our gross margins.

We currently derive substantially all of our sales from five customers, and the loss of any of these customers without replacement on comparable terms would affect our results of operations and cash available for distribution to our unitholders.

We have derived, and believe that we will continue to derive, substantially all of our sales from a limited number of customers that purchase all of the propylene we produce. For the twelve months ended December 31, 2011, Dow, Total and INEOS accounted for 55%, 24% and 16% of our total sales, respectively. Beginning January 1, 2012, we added BASF and LyondellBasell as contracted customers. When our current contracts with these customers expire, our customers may decide not to extend the contracts or may decide to purchase fewer pounds of propylene at lower prices during renegotiations. If our customers decide not to renew these contracts, or decide to purchase fewer pounds of propylene or at lower prices, and we are unable to find replacement counterparties on terms as favorable as our current contracts, our business, results of operations, financial condition and our ability to pay cash distributions to our unitholders may be materially adversely affected.

We are subject to many environmental and safety regulations that may result in unanticipated costs or liabilities, which could reduce our profitability.

We are subject to extensive federal, state and local laws, regulations, rules and ordinances relating to pollution, protection of the environment and human health, and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. Actual or alleged violations of environmental laws or permit requirements could result in restrictions or prohibitions on facility operations, substantial civil or criminal sanctions, as well as, under some environmental laws, the assessment of strict liability and/or joint and several liability.

Continually increasing concerns regarding the safety of chemicals in commerce and their potential impact on the environment constitute a growing trend. Governmental, regulatory and societal demands for continuously increasing levels of product safety and environmental protection could result in continued pressure for more stringent regulatory control with respect to the chemical industry. In addition, these concerns could influence public perceptions, the viability of certain products, our reputation, the cost to comply with regulations and the ability to attract and retain employees. Moreover, changes in environmental regulations could inhibit or interrupt our operations, or require us to modify our facilities or operations. Accordingly, environmental or regulatory matters may cause us to incur significant unanticipated losses, costs or liabilities, which could reduce our profitability.

We could incur significant expenditures in order to comply with existing or future environmental or safety laws. Capital expenditures and costs relating to environmental or safety matters will be subject to evolving regulatory requirements and will depend on the timing of the promulgation and enforcement of specific standards which impose requirements on our operations. Capital expenditures and costs beyond those currently anticipated may therefore be required under existing or future environmental or safety laws.

Furthermore, we may be liable for the costs of investigating and cleaning up environmental contamination on or from our properties or at off-site locations where we disposed of or arranged for the disposal or treatment of hazardous materials or from disposal activities that pre-dated our purchase of the PDH facility. We may, therefore, incur additional costs and expenditures beyond those currently

anticipated to address all such known and unknown situations under existing and future environmental laws.

Climate change laws and regulations could have a material adverse effect on our results of operations, financial condition and ability to pay cash distributions to our unitholders.

On December 15, 2009, the U.S. EPA published its findings that emissions of carbon dioxide and other "greenhouse gases" present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the earth's atmosphere and other climatic changes, and EPA has begun to regulate greenhouse gas emissions pursuant to the federal Clean Air Act ("CAA"). In addition, it is possible federal legislation could be adopted in the future to restrict greenhouse gas emissions. Many states and regions have adopted greenhouse gas initiatives. The cost of compliance with any new regulations could be significant.

We are subject to strict laws and regulations regarding employee and process safety, as well as the prevention of accidental releases, and failure to comply with these laws and regulations could have a material adverse effect on our results of operations, financial condition and ability to pay cash distributions to our unitholders.

Our facility is subject to the requirements of the federal Occupational Safety and Health Act ("OSHA"), and comparable state statutes that regulate the protection of the health and safety of workers. OSHA requires that we maintain information about hazardous materials used or produced in our operations and that we provide this information to employees, state and local governmental authorities and local residents. In addition, the Chemical Accident Prevention Provisions adopted by the EPA under the Clean Air Act require the development of a Risk Management Plan to prevent the accidental release of hazardous substances that could harm public health or the environment. Failure to comply with these requirements, including general industry standards, record keeping requirements and monitoring and control of potential exposure to regulated substances, could have a material adverse effect on our results of operations, financial condition and ability to pay cash distributions to our unitholders if we are subjected to significant fines or compliance costs.

Instability and volatility in the global capital and credit markets could negatively impact our business, financial condition, results of operations and cash flows.

The global capital and credit markets have experienced extreme volatility and disruption over the past few years. Our results of operations, financial condition and ability to pay cash distributions to our unitholders could be negatively impacted by difficult conditions and extreme volatility in the capital, credit and commodities markets and in the global economy. These factors, combined with declining business and consumer confidence and increased unemployment, precipitated an economic recession in the U.S. and globally during 2009 and 2010. The difficult conditions in these markets and the overall economy affect us in a number of ways. For example:

We depend on the services of the executive officers and other key personnel of our general partner. The loss of the services of any member of our executive officer team or key employee could have an adverse effect on our business and reduce our ability to make distributions to our unitholders. We may not be able to locate or employ on acceptable terms qualified replacements for senior management or other key employees if their services were no longer available.

In the event that payments that we are required to make under our propane swaps exceed the contributions that we receive under our omnibus agreement, we may be exposed to significant losses and our ability to make cash distributions to our unitholders may be materially and adversely affected.

Our business activities expose us to risks associated with unfavorable changes in the market price of propylene and propane. In October 2011, we began entering into derivative transactions with the intent of reducing volatility in our cash flows due to fluctuations in the price of propane (the "propane swaps"), our sole feedstock. In situations when the price of Brent crude oil is not correlated to the price of propylene, and propylene as a percent of Brent crude oil trades below Brent crude oil, or when the price of Brent crude oil is not correlated to the price of propane, the propane swaps would increase, rather than reduce, the volatility of our cash flows. For example, the price of Brent crude oil may increase significantly with no corresponding increase to either the propylene price or the propane price. Furthermore, the prices of both propane and propylene may trade significantly below their historical correlations to Brent crude oil. In these situations, we may owe more to the counterparty of our hedge, thus decreasing the amount of cash otherwise available for distribution to our unitholders, perhaps significantly. In addition, our hedging activities are subject to the risk that a counterparty may not perform its obligations under the applicable derivative instrument.

Contemporaneous with this offering, we will enter into an omnibus agreement with our general partner, Propylene Holdings, PL Manufacturing and the PL Manufacturing Members, through our general partner, will be allocated all of our benefits and obligations under the propane swaps. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner—Omnibus Agreement." Under the omnibus agreement, any amounts received by us under the propane swaps will be distributed, through our general partner, to the PL Manufacturing Members, and any amounts that we are required to pay under the propane swaps are expected to be contributed back to us as a capital contribution by the PL Manufacturing Members. While we will not receive any of the benefits of the propane swaps, we will remain a party to the propane swaps, and will be obligated to make payments to the propane swap counterparties as they come due and to post any collateral as required, under the terms of our agreement with the counterparty.

In connection with the omnibus agreement, the PL Manufacturing Members will pledge to PL Manufacturing (as collateral agent) a number of common units such that at all times, the market value of all pledged units is equal to or greater than 10 times the mark-to-market value of the propane swaps, but in no event shall the number of pledged units be greater than the amount of units distributed to the PL Manufacturing Members in the Transactions. The forecasted quarterly distributions payable on all pledged common units is expected to be sufficient to satisfy our obligations under the propane swaps. PL Manufacturing will receive all quarterly distribution payments that we make in respect of the pledged units. Of this distribution amount, PL Manufacturing will (1) first, contribute to us an amount equal to the total sum of all payments made by us under the propane swaps during the quarter or owed by us at the end of the quarter, (2) second, establish and maintain a reserve as reasonably necessary and (3) third, distribute any excess cash to the PL Manufacturing Members.

In any quarter in which the aggregate distributions paid on the pledged units are less than our liabilities under the propane swaps for such quarter, PL Manufacturing will apply any cash reserves toward the shortfall. Each of the PL Manufacturing Members will have the option to fund its pro rata portion of

any remaining shortfall (after application of the cash reserve) with cash. In the event that a PL Manufacturing Member elects not to fully fund its pro rata portion of the remaining shortfall, PL Manufacturing will liquidate a number of such PL Manufacturing Members' pledged units sufficient to cover its remaining share of the shortfall. Such sales could adversely affect the trading price of our common units.

The PL Manufacturing Members' obligations under the omnibus agreement are non-recourse to the PL Manufacturing Members and PL Manufacturing. In the event that payments that we are required to make under the propane swaps exceed the distributions on the pledged common units, the cash reserve and the value of the pledged common units, we may be exposed to significant losses and our ability to make cash distributions to our unitholders may be materially and adversely affected.

Certain members of our executive management team on whom we rely to manage important aspects of our business face conflicts regarding the allocation of their time.

We will rely on the executive officers and employees of our general partner to manage our operations and activities. Pursuant to a services agreement between our general partner and PL Midstream LLC ("PL Midstream"), an entity controlled by Lindsay Goldberg, certain executive officers and employees of our general partner will perform services for PL Midstream in addition to us. These shared executive officers and employees include our chief financial officer, our senior vice-president—commercial and many of their staff. Because the shared officers and employees allocate time among us and PL Midstream, they may face conflicts regarding the allocation of their time, which may adversely affect our business, results of operations and financial condition.

In addition, under our partnership agreement, the employees and executive officers of our general partner may, from time to time, provide management, advisory and administrative services to its affiliates and other persons.

A shortage of skilled labor, together with rising labor costs, could adversely affect our results of operations and cash available for distribution to our unitholders.

The efficient production of propylene using modern techniques and equipment requires skilled employees. Our PDH facility relies on technology that requires special expertise to operate efficiently and effectively. To the extent that the services of our key technical personnel become unavailable to us for any reason, we would be required to hire other personnel. We may not be able to locate or employ such qualified personnel on acceptable terms or at all. We face competition for these professionals from our competitors, our customers and other companies operating in our industry. If we are unable to find qualified employees, or if the cost to find qualified employees increases materially, our results of operations and cash available for distribution to our unitholders could be adversely affected.

Restrictions in the agreements governing our current and future indebtedness, including our new credit facilities, contain or will contain significant limitations on our business operations, including our ability to pay distributions and other payments.

On March 27, 2012, we entered into a new $350.0 million term loan facility and a new $120.0 million revolving credit facility (together, the "new credit facilities"). As of December 31, 2011, on a pro forma basis after giving effect to this offering and the use of the estimated proceeds hereof and the establishment of our new credit facility, we would have had $350.0 million of term loan debt outstanding and borrowing capacity of approximately $120.0 million under the new revolving credit facility. We and our subsidiary may incur significant additional indebtedness in the future. Our ability to pay distributions to our unitholders and our ability to borrow under these new credit facilities to fund distributions (if we elected to do so) is subject to covenant restrictions under the agreement governing the new credit facilities. We expect that our ability to make distributions to our common unitholders will depend, in part, on our ability to satisfy

applicable covenants as well as the absence of a default or event of default under the facilities. If we were unable to comply with any such covenant restrictions in any quarter, our ability to pay distributions to unitholders would be curtailed.

In addition, we will be subject to covenants contained in our new credit facilities and any agreement governing other future indebtedness that will, subject to significant exceptions, limit our ability and the ability of our operating subsidiary to, among other things: incur, assume or permit to exist additional indebtedness, guarantees and other contingent obligations, incur liens, make negative pledges, pay dividends or other distributions, make payments to our subsidiary, make certain loans and investments, consolidate, merge or sell all or substantially all of our assets. Any failure to comply with these covenants could result in a default under our new credit facilities. Upon a default, unless waived, the lenders under our new credit facilities would have all remedies available to a secured lender and could elect to terminate their commitments, cease making further loans, cause their loans to become due and payable in full, institute foreclosure proceedings against our or our subsidiary's assets and force us and our subsidiary into bankruptcy or liquidation.

Any increase in market interest rates would make our debt service obligations more burdensome, and in turn reduce our cash available for distributions to our unitholders.

Borrowings under our new credit facilities bear interest at variable rates. If market interest rates increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow and ability to pay cash distributions to our unitholders.

Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital and non-capital expenditures necessary to maintain the condition of our operating assets, properties and systems software, as well as to provide capacity for the growth of our business, depends on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and financial, business, competitive, legal and other factors.

If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing distributions, reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt, or seeking additional equity capital or bankruptcy protection.

Increases in interest rates could adversely impact our unit price and our ability to issue additional equity to make acquisitions, incur debt or for other purposes.

We cannot predict how interest rates will react to changing market conditions. Interest rates on our new credit facilities, future credit facilities and debt offerings could be higher than current levels, causing our financing costs to increase accordingly. Additionally, as with other yield-oriented securities, we expect that our unit price will be impacted by the level of our quarterly cash distributions and implied distribution yield. The distribution yield is often used by investors to compare and rank related yield-oriented securities for investment decision-making purposes. Therefore, changes in interest rates may affect the yield requirements of investors who invest in our common units, and a rising interest rate environment could have a material adverse impact on our unit price and our ability to issue additional equity to fund our operations or to make acquisitions or to incur debt as well as increasing our interest costs.

We are a holding company and depend upon our subsidiary for our cash flow.

We are a holding company. All of our operations are conducted and all of our assets are owned by PL Propylene, our wholly-owned subsidiary and our sole direct or indirect subsidiary. Consequently, our cash flow and our ability to meet our obligations or to pay cash distributions to our unitholders in the future will depend upon the cash flow of our subsidiary and the payment of funds by our subsidiary to us in the form of dividends or otherwise. The ability of our subsidiary to make any payments to us will depend on its

earnings, the terms of its indebtedness, including the terms of any credit facilities, and legal restrictions. In particular, future credit facilities incurred at our subsidiary may impose significant limitations on the ability of our subsidiary to pay distributions to us and consequently our ability to pay distributions to our unitholders. See also "—We may not have sufficient available cash to pay any quarterly distribution on our common units."

We will incur increased costs as a result of being a publicly traded partnership.

As a publicly traded partnership, we will incur significant legal, accounting and other expenses that we did not incur prior to this offering. In addition, the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010, as well as rules implemented by the SEC and the NYSE, require, or will require, publicly traded entities to adopt various corporate governance practices that will further increase our costs. Before we are able to pay distributions to our unitholders, we must first pay our expenses, including the costs of being a public company and other operating expenses. As a result, the amount of cash we have available for distribution to our unitholders will be affected by our expenses, including the costs associated with being a publicly traded partnership. We estimate that we will incur approximately $3.5 million of estimated incremental costs per year, some of which will be direct charges associated with being a publicly traded partnership and some of which will be allocated to us by our general partner and its affiliates; however, it is possible that our actual incremental costs of being a publicly traded partnership will be higher than we currently estimate.

Prior to this offering, we have not filed reports with the SEC. Following this offering, we will become subject to the public reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We expect these requirements will increase our legal and financial compliance costs and make compliance activities more time-consuming and costly. For example, as a result of becoming a publicly traded partnership, we are required to have at least three independent directors and adopt policies regarding internal controls and disclosure controls and procedures, including the preparation of reports on internal control over financial reporting. In addition, we will incur additional costs associated with our publicly traded company reporting requirements.

As a publicly traded partnership we qualify for, and will rely on, certain exemptions from the New York Stock Exchange's corporate governance requirements.

As a publicly traded partnership, we qualify for, and will rely on, certain exemptions from the NYSE's corporate governance requirements, including:

As a result of these exemptions, our general partner's board of directors will not be comprised of a majority of independent directors, our general partner's compensation committee may not be comprised entirely of independent directors and our general partner's board of directors does not currently intend to establish a nominating/corporate governance committee. Accordingly, unitholders will not have the same protections afforded to equityholders of companies that are subject to all of the corporate governance requirements of the NYSE. See "Management."

We will be exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act.

We are in the process of evaluating our internal controls systems to allow management to report on, and our independent auditors to audit, our internal controls over financial reporting. We will be performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and under current rules will be required to comply with Section 404 in our annual report for the year ended December 31, 2013. Furthermore, upon completion of this process, we may identify control deficiencies of varying degrees of severity under applicable SEC and Public Company Accounting Oversight Board, or PCAOB, rules and regulations that remain unremediated. Although we produce our financial statements in accordance with GAAP, our internal accounting controls may not currently meet all standards applicable to companies with publicly traded securities. As a publicly traded partnership, we will be required to report, among other things, control deficiencies that constitute a "material weakness" or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

If we fail to implement the requirements of Section 404 in a timely manner, we might be subject to sanctions or investigation by regulatory authorities such as the SEC. If we do not implement improvements to our disclosure controls and procedures or to our internal controls in a timely manner, our independent registered public accounting firm may not be able to certify as to the effectiveness of our internal controls over financial reporting pursuant to an audit of our internal controls over financial reporting. This may subject us to adverse regulatory consequences or a loss of confidence in the reliability of our financial statements. We could also suffer a loss of confidence in the reliability of our financial statements if our independent registered public accounting firm reports a material weakness in our internal controls, if we do not develop and maintain effective controls and procedures or if we are otherwise unable to deliver timely and reliable financial information. Any loss of confidence in the reliability of our financial statements or other negative reaction to our failure to develop timely or adequate disclosure controls and procedures or internal controls could result in a decline in the price of our common units. In addition, if we fail to remedy any material weakness, our financial statements may be inaccurate, we may face restricted access to the capital markets and the price of our common units may be adversely affected.

The board of directors of our general partner will adopt a policy to distribute all of the available cash we generate each quarter, which could limit our ability to grow and make acquisitions.

The board of directors of our general partner will adopt a policy to distribute all of the available cash we generate each quarter to our unitholders, beginning with the quarter ending June 30, 2012. As a result, our general partner will rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. As such, to the extent we are unable to finance growth externally, our cash distribution policy will significantly impair our ability to grow.

In addition, because the board of directors of our general partner will adopt a policy to distribute all of the available cash we generate each quarter, our growth may not be as robust as that of businesses that reinvest their available cash to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units will decrease the amount we distribute on each outstanding unit. There are no limitations in our partnership agreement on our ability to issue additional units, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt to finance our growth

strategy would result in increased interest expense, which, in turn, would reduce the available cash that we have to distribute to our unitholders. See "Our Cash Distribution Policy and Restrictions on Distributions."

Our general partner, which is indirectly owned by funds controlled by Lindsay Goldberg and York Capital, has fiduciary duties to Lindsay Goldberg and York Capital, and the interests of Lindsay Goldberg and York Capital may differ significantly from, or conflict with, the interests of our public common unitholders.

Our general partner is responsible for managing us. Although our general partner has legal duties to manage us in good faith, these duties are specifically limited by the express terms of our partnership agreement, and the directors and officers of our general partner also have fiduciary duties to manage our general partner in a manner beneficial to Lindsay Goldberg and York Capital, which will, collectively, own 84% of our general partner. The interests of Lindsay Goldberg and York Capital may differ from, or conflict with, the interests of our common unitholders. In resolving these conflicts, our general partner may favor its own interests or the interests of Lindsay Goldberg and York Capital over our interests and those of our common unitholders.

Our partnership agreement limits the liability and duties of our general partner and restricts the remedies available to us and our common unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty.

Our partnership agreement limits the liability and duties of our general partner, while also restricting the remedies available to our common unitholders for actions that, without these limitations and reductions, might constitute breaches of fiduciary duty. Delaware partnership law permits such contractual reductions of fiduciary duty. By purchasing common units, common unitholders consent to be bound by the partnership agreement, and pursuant to our partnership agreement, each holder of common units consents to various actions and conflicts of interest contemplated in our partnership agreement that might otherwise constitute a breach of fiduciary or other duties under Delaware law. Our partnership agreement contains provisions that reduce the standards to which our general partner would otherwise be held by state fiduciary duty law. For example:

In connection with a situation involving a transaction with an affiliate or a conflict of interest, any determination by our general partner must be made in good faith. If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or the conflicts committee then it will be presumed that, in making its decision, taking any action or failing to act, the board of directors acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. Please read "Conflicts of Interest and Fiduciary Duties."

By purchasing a common unit, a unitholder will become bound by the provisions of our partnership agreement, including the provisions described above. See "Description of Our Common Units—Transfer of Common Units."

Our sponsors have the power to appoint and remove our general partner's directors.

Upon the consummation of this offering, our sponsors will have the power to elect all of the members of the board of directors of our general partner. Our general partner has control over all decisions related to our operations. See "Management—Our Management." Our public unitholders do not have an ability to influence any operating decisions and will not be able to prevent us from entering into any transactions. Furthermore, the goals and objectives of our sponsors, as the owner of our general partner, may not be consistent with those of our public unitholders.

If at any time our general partner and its affiliates own more than 80% of the common units, our general partner will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held by public unitholders at a price not less than their then-current market price, as calculated pursuant to the terms of our partnership agreement. As a result, you may be required to sell your common units at an undesirable time or price and may not receive any return on your investment. You may also incur a tax liability upon a sale of your common units. Our general partner is not obligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon exercise of the call right. There is no restriction in our partnership agreement that prevents our general partner from issuing additional common units and then exercising its call right. Our general partner may use its own discretion, free of fiduciary duty restrictions, in determining whether to exercise this right. See "The Partnership Agreement—Call Right."

Our unitholders have limited voting rights and are not entitled to elect our general partner or our general partner's directors.

Unlike the holders of common stock in a corporation, our unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management's decisions regarding our business. Unitholders will have no right to elect our general partner or our general partner's board of directors on an annual or other continuing basis. The board of directors of our general partner, including the independent directors, will be chosen entirely by our sponsors as the owner of the general partner and not by our common unitholders. Unlike publicly traded corporations, we will not hold annual meetings of our unitholders to elect directors or conduct other matters routinely conducted at annual meetings of stockholders. Furthermore, even if our unitholders are dissatisfied with the performance of our general partner, they will have no practical ability to remove our general partner. As a result of these limitations, the price at which the common units will trade could be diminished.

Our public unitholders will not have sufficient voting power to remove our general partner without our sponsors' consent.

Following the closing of this offering, our sponsors will directly and indirectly own approximately 63% of our common units (or approximately 59% if the underwriters exercise their option to purchase additional common units in full), which means holders of common units purchased in this offering will not be able to remove the general partner, under any circumstances, unless our sponsors sell some of the common units that they own or we sell additional units to the public.

Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units (other than our general partner and its affiliates and permitted transferees).

Our partnership agreement restricts unitholders' voting rights by providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, may not vote on any matter. Our partnership agreement also contains provisions limiting the ability of common unitholders to call meetings or to acquire information about our

operations, as well as other provisions limiting the ability of our common unitholders to influence the manner or direction of management.

Cost reimbursements due to our general partner and its affiliates will reduce cash available for distribution to you.

Prior to making any distribution on our outstanding units, we will reimburse our general partner for all expenses it incurs on our behalf including, without limitation, salary, bonus, incentive compensation and other amounts paid to its employees and executive officers who perform services for us. There are no limits contained in our partnership agreement on the amounts or types of expenses for which our general partner and its affiliates may be reimbursed. The payment of these amounts, including allocated overhead, to our general partner and its affiliates could adversely affect our ability to make distributions to you. See "Our Cash Distribution Policy and Restrictions on Distributions," "Certain Relationships and Related Party Transactions" and "Conflicts of Interest and Fiduciary Duties—Conflicts of Interest."

In the event that: (1) we make distributions to our unitholders when our nonrecourse liabilities exceed the sum of (a) the fair market value of our assets not subject to recourse liability and (b) the excess of the fair market value of our assets subject to recourse liability over such liability, or a distribution causes such a result, and (2) a unitholder knows at the time of the distribution of such circumstances, such unitholder will be liable for a period of three years from the time of the impermissible distribution to repay the distribution under Section 17-607 of the Delaware Act.

Likewise, upon the winding up of the partnership, in the event that (1) we do not distribute assets in the following order: (a) to creditors in satisfaction of their liabilities; (b) to partners and former partners in satisfaction of liabilities for distributions owed under our partnership agreement; (c) to partners for the return of their contribution; and finally (d) to the partners in the proportions in which the partners share in distributions and (2) a unitholder knows at the time of such circumstances, then such unitholder will be liable for a period of three years from the impermissible distribution to repay the distribution under Section 17-807 of the Delaware Act.

A purchaser of common units who becomes a limited partner is liable for the obligations of the transferring limited partner to make contributions to us that are known by the purchaser at the time it became a limited partner and for unknown obligations if the liabilities could be determined from our partnership agreement.

Our general partner's interest in us and the control of our general partner may be transferred to a third party without unitholder consent.

Our general partner may transfer its general partner interest in us to a third party in a merger or in a sale of all or substantially all of its assets without the consent of the unitholders. Furthermore, there is no restriction in our partnership agreement on the ability of the owners of our general partner to transfer their equity interests in our general partner to a third party. The new equity owner of our general partner would then be in a position to replace the board of directors and the officers of our general partner with its own choices and to influence the decisions taken by the board of directors and officers of our general partner.

There is no existing market for our common units, and we do not know if one will develop to provide you with adequate liquidity. If our unit price fluctuates after this offering, you could lose a significant part of your investment.

Prior to this offering, there has not been a public market for our common units. If an active trading market does not develop, you may have difficulty selling any of our common units that you buy. The initial public offering price for the common units will be determined by negotiations between the selling unitholder and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our common units at prices equal to or

greater than the price paid by you in this offering. The market price of our common units may be influenced by many factors including:

As a result of these factors, investors in our common units may not be able to resell their common units at or above the initial offering price. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies like us. These broad market and industry factors may materially reduce the market price of our common units, regardless of our operating performance.

You will incur immediate and substantial dilution in net tangible book value per common unit.

The initial public offering price of our common units is substantially higher than the pro forma net tangible book value of our outstanding units. As a result, if you purchase common units in this offering, you will incur immediate and substantial dilution in the amount of $17.55 per common unit. This dilution results primarily because the assets contributed by Propylene Holdings are recorded at their historical costs, and not their fair value, in accordance with GAAP. See "Dilution."

We may issue additional common units and other equity interests without your approval, which would dilute your existing ownership interests.

Under our partnership agreement, we are authorized to issue an unlimited number of additional interests without a vote of the unitholders. The issuance by us of additional common units or other equity interests of equal or senior rank will have the following effects:

In addition, our partnership agreement does not prohibit the issuance of equity interests by our subsidiary, which may effectively rank senior to the common units.

Units eligible for future sale may cause the price of our common units to decline.

Sales of substantial amounts of our common units in the public market, or the perception that these sales may occur, could cause the market price of our common units to decline. This could also impair our ability to raise additional capital through the sale of our equity interests.

There will be 139,000,000 common units outstanding following this offering of which 35,000,000 common units are being sold to the public in this offering (or 40,250,000 common units if the underwriters exercise their option to purchase additional common units in full), and an aggregate 104,000,000 common units will be directly and indirectly owned by the PL Manufacturing Members following this offering (or 98,750,000 common units if the underwriters exercise their option to purchase additional common units in full). The common units sold in this offering will be freely transferable without restriction or further registration under the Securities Act of 1933, or the Securities Act, by persons other than "affiliates," as that term is defined in Rule 144 under the Securities Act.

In addition, in connection with this offering, we will enter into a registration rights agreement with David Lumpkins, Nathan Ticatch and our sponsors pursuant to which we may be required to register the sale of the common units they hold under the Securities Act and applicable state securities laws.

In connection with this offering, we, the PL Manufacturing Members and our general partner's directors will enter into lock-up agreements, pursuant to which they will agree, subject to certain exceptions, not to sell or transfer, directly or indirectly, any of our common units until 180 days from the date of this prospectus, subject to extension in certain circumstances. Following termination of these lockup agreements, all units held by these parties, will be freely tradable under Rule 144, subject to the volume and other limitations of Rule 144. See "Common Units Eligible for Future Sale."

In addition to reading the following risk factors, you should read "Material U.S. Federal Income Tax Consequences" for a more complete discussion of the expected material federal income tax consequences of owning and disposing of common units.

Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by individual states. If the IRS were to treat us as a corporation for federal income tax purposes or we were to become subject to material additional amounts of entity-level taxation for state tax purposes, then our cash available for distribution to you could be substantially reduced.

The anticipated after-tax economic benefit of an investment in our common units depends largely on our being treated as a partnership for U.S. federal income tax purposes. We have not requested, and do not plan to request, a ruling from the Internal Revenue Service (the "IRS"), on this or any other tax matter affecting us.

Despite the fact that we are organized as a limited partnership under Delaware law, it is possible in certain circumstances for a partnership such as ours to be treated as a corporation for federal income tax purposes. Although we do not believe, based upon our current operations, that we will be so treated, a change in our business (or a change in current law) could cause us to be treated as a corporation for federal income tax purposes or otherwise subject us to taxation as an entity.

If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our taxable income at the corporate tax rate, which is currently a maximum of 35% and would likely pay state income tax at varying rates. Distributions to you would generally be taxed again as corporate distributions, and no income, gains, losses, deductions or credits would flow through to you. Because a tax would be imposed upon us as a corporation, our cash available for distribution to you would be substantially reduced. Therefore, treatment of us as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to the unitholders, likely causing a substantial reduction in the value of our common units.

In Texas, we will be subject to an entity-level tax on any portion of our income that is generated in Texas in the prior year. Imposition of any such additional taxes on us or an increase in the existing tax rates would reduce the cash available for distribution to our unitholders.

The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial interpretation at any time. For example, members of Congress have recently considered substantive changes to the existing federal income tax laws that affect publicly traded partnerships. Any modification to the U.S. federal income tax laws and interpretations thereof may be applied retroactively and could impose additional administrative requirements on us or make it more difficult or impossible to meet the exception for certain publicly traded partnerships to be treated as partnerships for U.S. federal income tax purposes. Although the considered legislation would not appear to have affected our treatment as a partnership, we are unable to predict whether any of these changes, or other proposals will be reintroduced or will ultimately be enacted. Any such changes could negatively impact the value of an investment in our common units.

You will be required to pay taxes on your share of our income even if you do not receive any cash distributions from us.

Because our unitholders will be treated as partners to whom we will allocate taxable income that could be different in amount than the cash we distribute, you will be required to pay any federal income taxes and, in some cases, state and local income taxes on your share of our taxable income whether or not you receive cash distributions from us. You may not receive cash distributions from us equal to your share of our taxable income or even equal to the actual tax liability that results from that income.

The sale or exchange of 50% or more of our capital and profits interests during any twelve-month period will result in the termination of our partnership for federal income tax purposes.

We will be considered to have terminated our partnership for federal income tax purposes if there is a sale or exchange of 50% or more of the total interests in our capital and profits within a twelve-month period. Our termination would, among other things, result in the closing of our taxable year for all unitholders and could result in a deferral of depreciation deductions allowable in computing our taxable income. In the case of a unitholder reporting on a taxable year other than a fiscal year ending December 31, the closing of our taxable year may also result in more than twelve months of our taxable income or loss being includable in his taxable income for the year of termination. Our termination currently would not affect our classification as a partnership for federal income tax purposes, but instead, we would be treated as a new partnership for federal income tax purposes. If treated as a new partnership, we must make new tax elections and could be subject to penalties if we are unable to determine that a termination occurred. See "Material U.S. Federal Income Tax Consequences—Disposition of Units—Constructive Termination" for a discussion of the consequences of our termination for federal income tax purposes.

Tax gain or loss on the disposition of our common units could be more or less than expected.

If you sell your common units, you will recognize a gain or loss equal to the difference between the amount realized and your tax basis in those common units. Because distributions in excess of your allocable share of our net taxable income decrease your tax basis in your common units, the amount, if any, of such prior excess distributions with respect to the units you sell will, in effect, become taxable income to you if you sell such units at a price greater than your tax basis in those units, even if the price you receive is less than your original cost. Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depreciation recapture. In addition, because the amount realized includes a unitholder's share of our

nonrecourse liabilities, if you sell your units, you may incur a tax liability in excess of the amount of cash you receive from the sale. See "Material U.S. Federal Income Tax Consequences—Disposition of Units—Recognition of Gain or Loss" for a further discussion of the foregoing.

Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them.

Investment in common units by tax-exempt entities, such as employee benefit plans and individual retirement accounts ("IRAs"), and non-U.S. persons raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them. Distributions to non-U.S. persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S. persons will be required to file U.S. federal tax returns and pay tax on their share of our taxable income. If you are a tax-exempt entity or a non-U.S. person, you should consult your tax advisor before investing in our common units.

If the IRS contests the federal income tax positions we take, the market for our common units may be adversely impacted and the cost of any IRS contest will reduce our cash available for distribution to you.

The IRS may adopt positions that differ from the positions we take. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take. A court may not agree with some or all of the positions we take. Any contest with the IRS may materially and adversely impact the market for our common units and the price at which they trade. Our costs of any contest with the IRS will be borne indirectly by our unitholders and our general partner because the costs will reduce our cash available for distribution.

We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units.

Because we cannot match transferors and transferees of common units, we will adopt depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to you. It also could affect the timing of these tax benefits or the amount of gain from your sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to your tax returns. See "Material U.S. Federal Income Tax Consequences—Tax Consequences of Unit Ownership—Section 754 Election" for a further discussion of the effect of the depreciation and amortization positions we adopt.

We will prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our common units each month based upon the ownership of our common units on the first day of each month, instead of on the basis of the date a particular common unit is transferred. Nonetheless, we allocate certain deductions for depreciation of capital additions based upon the date the underlying property is placed in service. The use of this proration method may not be permitted under existing Treasury Regulations, and although the U.S. Treasury Department issued proposed Treasury Regulations allowing a similar monthly simplifying convention, such regulations are not final and do not specifically authorize the use of the proration method we have adopted. Accordingly, our counsel is unable to opine as to the validity of this method. If the IRS were to successfully challenge our proration method,

we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.

A unitholder whose common units are loaned to a "short seller" to cover a short sale of common units may be considered as having disposed of those common units. If so, he would no longer be treated for tax purposes as a partner with respect to those common units during the period of the loan and may recognize gain or loss from the disposition.

Because there is no tax concept of loaning a partnership interest, a unitholder whose common units are loaned to a "short seller" to cover a short sale of common units may be considered as having disposed of the loaned units. In that case, he may no longer be treated for tax purposes as a partner with respect to those common units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during the period of the loan to the short seller, any of our income, gain, loss or deduction with respect to those common units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those common units could be fully taxable as ordinary income. Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller should modify any applicable brokerage account agreements to prohibit their brokers from borrowing their common units.

Unitholders may be subject to state and local taxes and return filing requirements in jurisdictions where they do not live as a result of investing in our common units.

In addition to federal income taxes, unitholders may become subject to other taxes, including state, local and non-U.S. taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by jurisdictions in which we conduct business or own property in the future, even if they do not live in any of those jurisdictions. We currently conduct business only in Texas, which does not impose a personal income tax but does impose a tax on corporations and other entities. We may own property or conduct business in other states or non-U.S. countries in the future. Unitholders may be required to file state and local income tax returns and pay state and local income taxes in some or all of those various jurisdictions. Further, unitholders may be subject to penalties for failure to comply with those requirements. It is the unitholder's responsibility to file all U.S. federal, state, local and non-U.S. tax returns.

This prospectus contains forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Our forward-looking statements include statements about our business strategy, our industry, our future profitability, our expected capital expenditures (including environmental expenditures), the impact of such expenditures on our performance and the costs of operating as a public company. All statements herein about our forecast of available cash and our forecasted results for the twelve months ending June 30, 2013 constitute forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, including the factors described under "Risk Factors," that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Such risks and uncertainties include, among other things:

You should not place undue reliance on our forward-looking statements. Although forward-looking statements reflect our good faith beliefs, forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.

The following transactions have taken place or will take place in connection with this offering. We refer to these transactions collectively as the "Transactions":

Please see the charts on pages 8 and 9, respectively, for a depiction of our organizational structure prior to and after the Transactions take place.

The board of directors and executive officers of our general partner will manage our operations and activities. In order to carry out our operations, our general partner will employ approximately 100 employees. Our general partner is owned by our sponsors. Our general partner will not receive any management fee or other compensation in connection with the management of our business but will be entitled to be reimbursed for all direct and indirect expenses it incurs or payments it makes on our behalf (including salary, bonus, incentive compensation and other amounts paid to its employees and executive officers who perform services for us). Upon the closing of this offering, our general partner will own a general partner interest that does not entitle it to receive quarterly cash distributions. However, it may acquire common units in the future and, if it does so, will be entitled to receive pro rata distributions therefrom.

Unlike shareholders in a corporation, our common unitholders are not entitled to elect our general partner or the board of directors of our general partner. See "Management—Our Management."

PetroLogistics GP LLC, our general partner, has legal duties to manage us in good faith. The officers and directors of our general partner also have fiduciary duties to manage the business of our general partner in a manner beneficial to its owners, including our sponsors. As a result of these relationships, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and our general partner and its affiliates, on the other hand. For a more detailed description of the conflicts of interest and fiduciary duties of our general partner, see "Risk Factors—Risks Related to an Investment in Us" and "Conflicts of Interest and Fiduciary Duties."

Our partnership agreement limits the liability and duties of our general partner and its directors and officers to our unitholders. Our partnership agreement also restricts the remedies available to unitholders for actions that might otherwise constitute breaches of our general partner's fiduciary duties. By purchasing a common unit, you are consenting to be bound by the terms of our partnership agreement, and pursuant to our partnership agreement, each holder of common units consents to various actions and conflicts of interest contemplated in our partnership agreement that might otherwise be considered a breach of fiduciary or other duties under Delaware law. See "Conflicts of Interest and Fiduciary Duties—Fiduciary Duties" for a description of the fiduciary duties imposed on our general partner by Delaware law, the material modifications of these duties contained in our partnership agreement and certain legal rights and remedies available to unitholders. In addition, our general partner will have the right to call, under specified circumstances, all of the outstanding common units without considering whether this is in the interest of our common unitholders. For a description of such call right, see "The Partnership Agreement—Call Right."

For a description of our other relationships with our affiliates, see "Certain Relationships and Related Party Transactions."

We expect to receive approximately $23.3 million of net proceeds from our sale of 1,500,000 common units in this offering, after deducting related underwriting discounts and commissions and the estimated expenses of this offering, based on an assumed initial public offering price of $20.00 per common unit (the mid-point of the price range set forth on the cover page of the prospectus). We intend to use the net proceeds of this offering for working capital and general partnership purposes, for funding certain future capital expenditures at our facility, including a portion of those associated with our planned major maintenance project in 2013 to replace the reactor catalyst, and for funding a portion of the quarterly distributions to our common unitholders for the lost margin resulting therefrom.

We will not receive any proceeds from the sale of common units by the selling unitholder in this offering, including proceeds from the sale of additional common units by the selling unitholder pursuant to the underwriters' option to purchase additional common units.

A $1.00 increase (or decrease) in the assumed initial public offering price of $20.00 per common unit would increase (decrease) the net proceeds to us from this offering by $1.4 million, assuming the number of common units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions. The actual initial public offering price is subject to market conditions and negotiations between us, the selling unitholder and the underwriters.

Propylene Holdings has contributed PL Propylene to us. Pursuant to our partnership agreement, the 99% limited partner interest in us owned by Propylene Holdings was recapitalized into 136,125,000 common units, of which Propylene Holdings is selling 33,500,000 common units in this offering (38,750,000 if the underwriters exercise in full their option to purchase additional common units) and will distribute the proceeds from such sale (and common units, to the extent the underwriters do not exercise in full their option to purchase additional common units) to its sole member, PL Manufacturing, which will then redistribute the units and such rights to the PL Manufacturing Members, in accordance with their capital accounts and pursuant to the PL Manufacturing limited liability company agreement, as amended. For a detailed description of these transactions, see "The Transactions and Our Structure and Organization."

The following table sets forth our cash and cash equivalents, restricted cash and capitalization as of December 31, 2011 on:

You should read this table in conjunction with "The Transactions and Our Structure and Organization," "Use of Proceeds," "Selected Historical and Pro Forma Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the financial statements and related notes included elsewhere in this prospectus.

		As of December 31, 2011

		Actual		Pro Forma Consolidated
				(unaudited)
		(in thousands)
Cash and cash equivalents		$	—	$	47,267
Restricted cash			45,808		—

Prior term loan⁽¹⁾			145,115		—
Prior revolving credit facility⁽¹⁾			—		—
New term loan facility⁽¹⁾			—		343,000
New revolving credit facility⁽²⁾			—		—
Member's/Partners' capital:
	PL Propylene		544,782		—
	PetroLogistics LP:
	Common units: none issued and outstanding actual; 139,000,000 issued and outstanding pro forma		—		351,271
	General partner interest		—		—

Total member's/partners' capital			544,782		351,271

Total capitalization		$	689,897	$	694,271

Purchasers of common units offered by this prospectus will suffer immediate and substantial dilution in net tangible book value per unit. Our unaudited pro forma consolidated net tangible book value as of December 31, 2011, excluding the net proceeds of this offering, was approximately $317.2 million, or approximately $2.31 per unit. Unaudited pro forma consolidated net tangible book value per unit gives effect to the pro forma adjustments described in the notes to our unaudited pro forma consolidated financial statements included elsewhere in this prospectus (other than the issuance and sale of common units in this offering and the receipt of the net proceeds from this offering as described under "Use of Proceeds") and represents the amount of unaudited pro forma consolidated tangible assets less unaudited pro forma consolidated total liabilities (excluding the net proceeds of this offering), divided by the pro forma number of units outstanding (excluding the units issued in this offering).

Dilution in net tangible book value per unit represents the difference between the amount per unit paid by purchasers of our common units in this offering and the unaudited pro forma consolidated net tangible book value per unit immediately after this offering. After giving effect to the sale of 1,500,000 common units by us and 33,500,000 common units by Holdings in this offering at an assumed initial public offering price of $20.00 per common unit (the mid-point of the price range set forth on the cover page of the prospectus), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our unaudited pro forma consolidated net tangible book value as of December 31, 2011, would have been approximately $340.5 million, or $2.45 per unit. This represents an immediate increase in net tangible book value of $0.14 per unit to our existing unitholders and an immediate pro forma dilution of $17.55 per unit to purchasers of common units in this offering. The following table illustrates this dilution on a per unit basis:


Assumed initial public offering price per common unit			$	20.00
Unaudited pro forma consolidated net tangible book value per unit before this offering⁽¹⁾	$	2.31
Increase in net tangible book value per unit attributable to purchasers in this offering and use of proceeds	$	0.14
Less: Unaudited pro forma consolidated net tangible book value per unit after this offering⁽²⁾	$	2.45

Immediate dilution in net tangible book value per common unit to purchasers in this offering			$	17.55

A $1.00 increase (decrease) in the assumed initial public offering price of $20.00 per common unit (the mid-point of the price range set forth on the cover page of the prospectus) would increase (decrease) our unaudited pro forma consolidated net tangible book value by $1.4 million, the unaudited pro forma consolidated net tangible book value per unit by $0.01 and the dilution per common unit to new investors by $0.01, assuming the number of common units offered by us, as set forth on the cover page of this prospectus, remains the same and the underwriters do not exercise their option to purchase additional common units, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

The following table sets forth the total value contributed by Propylene Holdings and its affiliates in respect of the units held by them and the total amount of consideration contributed to us by the purchasers of common units in this offering upon the completion of the Transactions.

A $1.00 increase (decrease) in the assumed initial public offering price of $20.00 per common unit would increase (decrease) total consideration paid by new investors and total consideration paid by all unitholders by $32.9 million, assuming the number of common units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

You should read the following discussion of our cash distribution policy and restrictions on distributions in conjunction with the specific assumptions upon which our cash distribution policy is based. See "—Assumptions and Considerations" below. For additional information regarding our historical and our pro forma operating results, you should refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations," our predecessor's audited historical financial statements, our predecessor's unaudited historical financial statements and our unaudited pro forma consolidated financial statements included elsewhere in this prospectus. In addition, you should read "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" for information regarding statements that do not relate strictly to historical or current facts and certain risks inherent in our business.

The board of directors of our general partner will adopt a policy pursuant to which we will distribute all of the available cash we generate each quarter, beginning with the quarter ending June 30, 2012. Available cash for each quarter will be determined by the board of directors of our general partner following the end of such quarter. We expect that available cash for each quarter will generally equal our cash flow from operations for the quarter, less cash needed for capital expenditures, debt service and other contractual obligations, reserves for future operating or capital needs that the board of directors of our general partner deems necessary or appropriate and reserves to fund quarterly distributions to our unitholders during future periods of decreased production associated with planned maintenance turnarounds. Available cash will be calculated after giving pro forma effect to any contributions received (or to be received) by us, if any, and any special distributions paid (or to be paid) by us under the omnibus agreement that we will enter into contemporaneously with the closing of this offering. Except in connection with our triennial maintenance projects, we do not intend to maintain excess distribution coverage or reserve cash for the purpose of maintaining stability or growth in our quarterly distribution. We do not intend to incur debt to pay quarterly distributions. We expect to finance substantially all of our growth externally, either by debt issuances or additional issuances of equity.

Because our policy will be to distribute all available cash we generate each quarter, our unitholders will have direct exposure to fluctuations in the amount of cash generated by our business. We expect that the amount of our quarterly distributions, if any, will vary based on our operating cash flow during each quarter. Though such variations will be mitigated in respect of periods of planned maintenance downtime by the application of cash reserves, our quarterly cash distributions, if any, will generally not be stable and will vary from quarter to quarter and year to year as a direct result of variations in (i) our operating performance (ii) cash flow caused by fluctuations in the price of propane and propylene, working capital or capital expenditures and (iii) such other cash reserves deemed necessary and appropriate by the board of directors of our general partner. Such variations may be significant. The board of directors of our general partner may change the foregoing distribution policy at any time. Our partnership agreement does not require us to pay cash distributions to our unitholders on a quarterly or other basis.

A decision by the board of directors of our general partner to hold cash reserves as described above may have an adverse impact on the available cash in the quarter in which the reserves are withheld and a corresponding mitigating impact on the future quarter(s) in which the reserves are utilized.

For example, in the quarters preceding our triennial planned outages for major maintenance associated with the change-out of our reactor catalyst, the board of directors of our general partner may or may not elect to reserve amounts to fund (i) the capital costs associated with the change-out of our reactor catalyst described elsewhere in this prospectus, (ii) all or a portion of the revenues projected to be foregone as a result of the loss of production during the downtime associated with the outage or (iii) both. Based upon the decisions made by the board of directors of our general partner, the cash available for

distribution in the quarters preceding such a planned maintenance event in which the reserves are withheld may be adversely impacted. Conversely, additional amounts may be required to be reserved from available cash generated in a quarter subsequent to such a planned maintenance event should the scope of the actual work performed during such period be materially different than that planned.

Our PDH facility did not generate sales until the commencement of commercial operations in October 2010, and we did not achieve daily production rates sufficient to generate available cash for quarterly distribution to our unitholders until April 2011. Furthermore, because of industry conditions and a planned outage lasting 25 days, we would not have generated sufficient cash to pay a distribution for the fourth quarter of 2011.

There is no guarantee that unitholders will receive quarterly cash distributions from us. Our distribution policy may be changed at any time and is subject to certain restrictions, including:

We have a limited operating history upon which to rely in evaluating whether we will have sufficient cash to allow us to pay distributions on our common units. While we believe, based on our financial forecast and related assumptions, that we should have sufficient cash to enable us to pay the forecasted aggregate distribution on all of our common units for the twelve months ending June 30, 2013, we may be unable to pay the forecasted distribution or any amount on our common units.

We intend to pay our quarterly distributions on or about the 15th day of each February, May, August and November to holders of record on or about the first day of each such month. We expect our first distribution will include available cash for the period from the closing of this offering through June 30, 2012.

In the section that follows, we present "PetroLogistics LP Estimated Available Cash for the Twelve Months Ending June 30, 2013," that contains our unaudited forecast of available cash for the twelve months ending June 30, 2013.

We do not as a matter of course make or intend to make projections as to future sales, earnings, or other results. However, our management has prepared the prospective financial information set forth below in the table entitled "PetroLogistics LP Estimated Available Cash for the Twelve Months Ending June 30, 2013" to supplement the historical and unaudited pro forma consolidated financials included elsewhere in this prospectus. The table presents our expectations regarding our ability to generate $305.7 million of available cash for the twelve months ending June 30, 2013. The accompanying prospective financial information was not prepared with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of our management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management's knowledge and belief, the expected course of action and our expected future financial performance. However, this information is not fact and should not be relied upon as being indicative of future results, and readers of this prospectus are cautioned not to place undue reliance on the prospective financial information. Neither our independent registered public accounting firm, nor any other registered public accounting firm, has compiled, examined, or performed any procedures with respect to the prospective financial information contained in this section, nor have any of them expressed any opinion or any other form of assurance on such information or its achievability and each assumes no responsibility for, and disclaims any association with, the prospective financial information. Our independent registered public accounting firm's reports included elsewhere in this prospectus relate to our audited historical financial information. These reports do not extend to the tables and the related forecasted information contained in this section and should not be read to do so. See "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors."

During the twelve months ending June 30, 2013, we estimate that we will generate $305.7 million of available cash. In "—Assumptions and Considerations" below, we discuss the major assumptions underlying this estimate. We can give you no assurance that our assumptions will be realized or that we will generate any available cash, in which event we will not be able to pay quarterly cash distributions on our common units.

Although we have not included data for the six months ending June 30, 2012, based on our review of preliminary information available to us in respect of the three months ended March 31, 2012, and management's expectations with respect to the three months ending June 30, 2012, we believe that our results of operations for the six months ending June 30, 2012, will be substantially consistent with our expectations for the twelve months ending June 30, 2013. As a result, we do not anticipate that our available cash for the six months ending June 30, 2012 will be materially different (other than due to the shorter length of the period) from our forecasted available cash for the twelve months ending June 30, 2013.

When considering our ability to generate available cash and how we calculate forecasted available cash, investors should keep in mind all of the risk factors and other cautionary statements under the headings "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements," which describe factors that could cause our results of operations and available cash to vary significantly from our estimates.

The assumptions and estimates underlying the prospective financial information are inherently uncertain. Although such assumptions and estimates are considered, as of the date of this prospectus, to be reasonable by our management team, such assumptions and estimates are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of our future performance or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this prospectus should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.

We do not undertake any obligation to release publicly the results of any future revisions we may make to the financial forecast or to update this financial forecast to reflect events or circumstances after the date of this prospectus. In light of the above, the statement that we believe that we will have sufficient available cash to allow us to pay the forecasted quarterly distributions on all of our outstanding common units for the twelve months ending June 30, 2013, should not be regarded as a representation by us or the underwriters or any other person that we will make such distributions. Therefore, you are cautioned not to place undue reliance on this information.

The following table shows how we calculate estimated available cash for the twelve months ending June 30, 2013. The assumptions that we believe are relevant to particular line items in the table below are explained in the corresponding footnotes and in "—Assumptions and Considerations."

PetroLogistics LP
Estimated Available Cash for the
Twelve Months Ending June 30, 2013

The following table illustrates the amount of cash that we estimate that we will generate for the twelve months ending June 30, 2013 that would be available for distribution to our unitholders. All of the amounts for the twelve months ending June 30, 2013 in the table below are estimates.

		Twelve Months Ending June 30, 2013

		(in millions)
Total sales		$	1,005.9
Cost of sales:
	Storage, delivery & pipeline management fees		2.4
Production cost:
	Propane		531.8
	Fuel and utilities		37.9
	Depreciation, amortization and accretion		37.3
	Insurance and property taxes		16.8
	Direct operating expenses and other		50.3

	Total production cost		674.1
Change in product inventory			(17.3	)

Total cost of sales			659.2

Gross profit			346.7
Realized loss on derivatives			24.8
Unrealized gain on derivatives			(24.8	)
General and administrative expense			14.5
Interest expense and other financing costs			29.1
Interest income			(0.4	)
Income tax expense			3.5

Net income		$	300.0
Adjustments to reconcile net income to Adjusted EBITDA:
Add:
	Interest expense and other financing costs		29.1
	Unrealized gain on derivatives		(24.8	)
	PL Manufacturing Members' contribution		24.8
	Income tax expense		3.5
	Depreciation, amortization and accretion		37.3

Adjusted EBITDA		$	369.9
Adjustments to reconcile Adjusted EBITDA to available cash:
Subtract:
	Debt service costs		29.5
	Cash income tax		3.5
	Reserve for catalyst turnaround		23.7
	Capital expenditures⁽¹⁾		7.5

Available cash⁽²⁾		$	305.7

New credit facilities⁽³⁾:
	Interest coverage ratio		12.7x
	Leverage ratio		0.8x

Based upon the specific assumptions outlined below with respect to the twelve months ending June 30, 2013, we expect to generate Adjusted EBITDA and available cash in an amount sufficient to allow us to make quarterly distributions totalling $2.20 per common unit on all of our outstanding common units for the twelve months ending June 30, 2013.

While we believe that these assumptions are reasonable in light of our management's current expectations concerning future events, the estimates underlying these assumptions are inherently uncertain and are subject to significant business, economic, regulatory, environmental and competitive risks and uncertainties that could cause actual results to differ materially from those we anticipate. If our assumptions are not correct, the amount of actual cash available to pay quarterly distributions could be substantially less than the amount we currently estimate and could, therefore, be insufficient to allow us to pay the forecasted aggregate quarterly cash distributions for the twelve months ending June 30, 2013, or any amount, on all of our outstanding common units, in which event the market price of our common units may decline substantially. When reading this section, you should keep in mind the risk factors and other cautionary statements under the headings "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements." Any of the risks discussed in this prospectus could cause our actual results to vary significantly from our estimates.

The accompanying financial forecast and specific significant forecast assumptions of PetroLogistics LP present the forecasted results of operations of PetroLogistics LP for the twelve months ending June 30, 2013, assuming that the Transactions (as defined on page 45 of this prospectus) had occurred at the beginning of such period.

For the twelve months ending June 30, 2013, we estimate our facility will operate at an average capacity utilization rate of approximately 91% on an annual basis after making an allowance for downtime associated with maintenance on the facility and the potential for customers to nominate volumes below their maximum allocations. There is no planned downtime for the forecast period. Our newly constructed facility has an annual production capacity of approximately 1.45 billion pounds of propylene.

Propylene. We have secured contracts with Dow, Total, BASF, INEOS and LyondellBasell for the purchase of an aggregate minimum offtake volume of approximately 75% and maximum offtake volume of approximately 100% of our current facility propylene capacity. We forecast that we will sell approximately 1.294 billion pounds of propylene (or 89% of our current facility capacity) at an average price of $0.76 per pound, inclusive of customer discounts and PGP/CGP mix, during the forecast period. The forecasted benchmark price for PGP was determined by management based on price projection data received from Chemical Data and is forecasted to be $0.81 per pound. Based on these assumptions, we forecast our net propylene sales for the twelve months ending June 30, 2013, will be approximately $987.3 million.

Holding all other variables constant, we expect that a 10% change in the price per pound of propylene would change our forecasted available cash by approximately $98.7 million for the twelve months ending June 30, 2013.

Hydrogen. We have executed a ten-year contract with Praxair in which Praxair has committed to buy a minimum of 93% of the hydrogen we produce. We forecast that we will sell approximately 6.1 million MSCF (thousand standard cubic feet) of hydrogen to Praxair at an average price of $1.45 per MSCF for net sales of $8.8 million during the forecast period. The estimated amount of hydrogen we will produce during the forecast period was determined by management based upon the amount of propylene we expect

to produce. The estimated price per MSCF of hydrogen sold during the forecast period was determined by management based on price projections data received from Chemical Data.

C4 Mix/C5+ Streams. We estimate that we will sell approximately 25.2 million pounds of C4 mix/C5+ streams at an average price of $0.39 per pound for net sales of $9.8 million during the forecast period. We estimate net sales based on a forecast of future C4 mix/C5+ streams prices multiplied by the number of pounds we estimate we will produce and sell during the forecast period. The estimated amount of C4 mix/C5+ streams we will produce during the forecast period was determined by management based upon the amount of propylene we expect to produce. The estimated price per pound of C4 mix/C5+ streams sold during the forecast period was determined by management based on price projections data received from Chemical Data.

Based on these assumptions, we estimate that our total net sales for the twelve months ending June 30, 2013, will be approximately $1,005.9 million.

Cost of sales includes cost of propane, fuel and utility expenses, depreciation, amortization and accretion expense, insurance and property taxes, direct operating expenses, other expenses and changes in inventory. Our feedstock and raw material expenses consist of inputs into the propylene production process which are driven by commodity prices and volumes. Approximately 81% of our forecasted cost of sales is related to the purchase of propane. We estimate that our cost of sales for the twelve months ending June 30, 2013, will be approximately $659.2 million, or approximately 66% of sales, approximately $13.2 million of which will be paid to our general partner to reimburse it for payroll and benefits expenses of production employees incurred on our behalf.

Propane. We intend to purchase 100% of our required propane feedstock volumes through a multi-year supply contract with Enterprise. This supply contract will be priced at a published high-low monthly average price plus certain contractual upcharges and delivery fees. We assume that our product yield will be a ratio of approximately 1.2 pounds of propane to 1.0 pound of propylene and that we will purchase a total of 378.1 million gallons (or 1.59 billion pounds) of propane during the forecast period. We estimate that our total propane expense for the twelve months ending June 30, 2013, will be approximately $531.8 million and that our realized propane cost for the twelve months ending June 30, 2013, will be approximately $1.41 per gallon. The estimated amount of propane we will utilize during the forecast period was determined by management based upon the amount of propylene we expect to produce and the yield we forecast for our PDH facility. The estimated price per gallon of propane we will pay during the forecast period was determined by management based on price projections data received from Chemical Data.

Holding all other variables constant, we estimate that a 10% change per gallon in the price of propane would change our forecasted available cash by $53.2 million for the twelve months ending June 30, 2013.

Fuel/Utilities. We intend to purchase our natural gas fuel pursuant to a three-year contract with Kinder Morgan. We use natural gas to run our generator, propane heater and other related systems. We estimate that our total natural gas usage expense, based upon the amount of propylene we expect to produce, for the twelve months ending June 30, 2013, will be approximately $28.4 million and that our average natural gas cost for the twelve months ending June 30, 2013, will be approximately $2.85 per MMBtu. The estimated price per MMBtu of natural gas we will pay during the forecast period was determined by management based on price projections data received from Chemical Data. We also incur variable electricity, nitrogen and water usage expenses necessary to operate our dehydrogenation facility on a day-to-day basis. Based on management's usage expectations, we estimate that our electricity, nitrogen and water expense will be approximately $9.5 million. We estimate that our total fuel and utilities expense for the twelve months ending June 30, 2013, will be approximately $37.9 million.

Depreciation, Amortization and Accretion. We estimate that depreciation, amortization and accretion for the twelve months ending June 30, 2013, will be approximately $37.3 million.

Insurance and Property Taxes. A significant component of our cost of sales is the cost of insurance and property taxes, which we expect to be approximately $16.8 million for the twelve months ending June 30, 2013.

Direct Operating Expenses and Other. Direct operating expenses include all direct and indirect labor at the facility, materials, supplies, and other expenses associated with the operation and maintenance of the facility. We estimate that our direct operating and other expenses for the twelve months ending June 30, 2013, will be approximately $50.3 million.

General and administrative expense includes salary and benefits costs for executive management, accounting and information technology personnel, legal, audit, tax and other professional service costs and charges for equity-based compensation expense. We estimate that our general and administrative expense, excluding equity-based compensation expense, will be approximately $14.5 million for the twelve months ending June 30, 2013. Of the $14.5 million of total general and administrative expense, we estimate that we will pay approximately $6.7 million to our general partner to reimburse it for general and administrative payroll and benefits expenses and other administrative overhead costs it incurs on our behalf.

Debt service is defined as cash interest expense and debt amortization payments. As part of the Transactions, we borrowed $350.0 million under our new term loan facility at an assumed average interest rate of 7% and an annual amortization rate of 1%. We also entered into a $120.0 revolving credit facility and will pay associated interest expense for the twelve months ending June 30, 2013. We assume amortization of approximately $3.1 million of deferred financing and original issue discount costs related to our term loan facility and revolving credit facility. We have assumed that the average interest rate on the revolver will be 6%.

We estimate that we will pay no federal income tax during the forecast period. We believe the only income tax to which our operations will be subject is the Texas Margin Tax which is estimated to be 1.0% of gross margins for the twelve months ending June 30, 2013.

Our forecast for the twelve months ending June 30, 2013, is based on the following assumptions related to regulatory, industry and economic factors:

Actual conditions may differ materially from those anticipated in this section as a result of a number of factors, including, but not limited to, those set forth under "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements."

Our ability to make distributions could be affected if we do not remain in compliance with the covenants contained in our new credit facilities. We have assumed we will be in compliance with such covenants.

In October 2011, we entered into propane swaps intended to mitigate our exposure to changes in the price of propane that we purchase. We estimate that losses attributable to these propane swaps will be $24.8 million during the forecast period. Under the omnibus agreement that we will enter into contemporaneous with the closing of this offering, any amounts received by us under the propane swaps will be distributed, through our general partner, to the PL Manufacturing Members, and any amounts that we are required to pay under the propane swaps are expected to be contributed back to us as a capital contribution by the PL Manufacturing Members. In the absence of the omnibus agreement, we would not receive contributions to offset the projected losses on derivatives, in which case we estimate that our available cash will be $280.9 million for the twelve months ending June 30, 2013. For more information regarding the propane swaps, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosure about Market Risk."

Within 45 days after the end of each quarter, beginning with the quarter ending June 30, 2012, we expect to make distributions, as determined by the board of directors of our general partner, to unitholders of record on the applicable record date.

Upon the closing of this offering, we will have 139,000,000 common units outstanding. Each common unit will be allocated a portion of our income, gain, loss, deduction and credit on a pro-rata basis, and each common unit will be entitled to receive distributions (including upon liquidation) in the same manner as each other unit.

The board of directors of our general partner will adopt a policy at or prior to the closing of this offering (which policy may be changed at any time), pursuant to which we will make quarterly distributions pursuant to our general partner's determination of the amount of available cash for the applicable quarter, which we will then distribute to our unitholders, pro rata; provided, however, that our partnership agreement allows us to issue an unlimited number of additional equity interests of equal or senior rank. Our partnership agreement permits us to borrow to make quarterly distributions, but we are neither required, nor do we intend to borrow to pay quarterly distributions. Accordingly, there is no guarantee that we will pay any distribution on the units in any quarter. We do not have a legal obligation to pay quarterly distributions, and the amount of quarterly distributions paid under our policy and the decision to make any quarterly distribution will be determined by the board of directors of our general partner. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Facilities" for a discussion of provisions contained in the agreement governing our new credit facilities that restrict our ability to make quarterly distributions.

Upon the closing of this offering, our general partner will own a general partner interest that will not entitle it to receive quarterly cash distributions. However, it may acquire common units and other equity interests in the future and would be entitled to receive pro rata distributions therefrom.

We will make adjustments to capital accounts upon the issuance of additional common units. In doing so, we will generally allocate any unrealized and, for tax purposes, unrecognized gain or loss resulting from the adjustments to our unitholders prior to such issuance on a pro rata basis so that after such issuance the capital account balances attributable to all common units are equal.

The selected historical financial information presented below under the caption Statement of Operations Data for each of the four years in the period ended December 31, 2011, and the selected historical financial information presented below under the caption Balance Sheet Data as of December 31, 2011, 2010, 2009 and 2008, have been derived from the audited financial statements of our predecessor, PL Propylene, included elsewhere in this prospectus. Our predecessor was formed in January 2007 and acquired the site where our PDH facility is located in March 2008. We commenced operations in October 2010 and, after an approximately year-long start-up and plant optimization phase, achieved production rates at or near current capacity beginning in December 2011.

The selected unaudited pro forma consolidated financial information presented below under the caption Statement of Operations Data for the year ended December 31, 2011, and the selected unaudited pro forma consolidated financial information presented below under the caption Balance Sheet Data as of December 31, 2011, have been derived from our unaudited pro forma consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma consolidated statement of operations data for the year ended December 31, 2011, was prepared based on the assumption that we were in existence as a separate entity throughout that period and that the transactions described below occurred on January 1, 2011:

	Historical

	Historical												Unaudited Pro Forma Consolidated
	Year Ended December 31,												Unaudited Pro Forma Consolidated
	Year Ended December 31,												Year Ended December 31, 2011
	2011			2010			2009			2008			Year Ended December 31, 2011
	(dollars in millions, except per unit data and as otherwise indicated)
Statement of Operations Data:
Sales	$	614.9		$	30.4		$	—		$	—		$	614.9
Cost of sales		496.8			41.9			—			—			496.8
General and administrative expense		73.3			22.9			4.3			4.7			73.3
Management fee		2.0			—			—			—			—
Loss on derivatives		1.7			—			—			—			1.7

Operating income (loss)		41.1			(34.4	)		(4.3	)		(4.7	)		43.1
Interest income (expense), net		(17.9	)		(5.4	)		(0.2	)		0.7			(28.9	)
Other income		0.1			0.1			—			—			0.1

Net income (loss) before income tax expense	$	23.3		$	(39.7	)	$	(4.5	)	$	(4.0	)	$	14.3
Income tax expense		(1.4	)		—			—			—			(1.4	)

Net income (loss)	$	21.9		$	(39.7	)	$	(4.5	)	$	(4.0	)	$	12.9

Pro forma net income per common unit, basic and diluted													$	.09
Pro forma number of common units, basic and diluted in millions														139.0
Balance Sheet Data:
Cash (including restricted cash balances)	$	45.8		$	6.9		$	30.0		$	71.8		$	47.3
Working capital⁽¹⁾		64.0			16.0			9.9			61.4			64.7
Total assets		741.5			668.9			484.6			214.1			743.0
Total debt, net of discount (including current portion)		145.1			189.5			94.7			—			343.0
Member's equity		544.8			456.1			365.5			202.9			351.3
Financial and Other Data:
Cash flows provided by (used in) operating activities	$	84.6		$	(53.2	)	$	—		$	(1.0	)
Cash flows used in investing activities		(28.5	)		(157.4	)		(281.2	)		(170.0	)
Cash flows provided by (used in) financing activities		(56.1	)		210.7			249.1			203.0
Adjusted EBITDA⁽²⁾		144.8			(12.6	)		(3.6	)		(2.0	)		146.8
Capital expenditures		28.5			187.5			291.0			130.2
Key Operating Data:
Production volume (thousand pounds, unless otherwise noted):
Propylene		844,608			76,522			—			—
Hydrogen (thousand standard cubic feet, MSCF)		3,802,923			—			—			—
C4 mix/C5+ streams		17,302			247			—			—

(1)

Working capital is defined as current assets, including cash, less current liabilities, excluding bank debt.

(2)

Adjusted EBITDA is defined as net income (loss) plus interest expense and amortization of deferred financing costs, income tax expense, depreciation, amortization and accretion, equity-based compensation expense and unrealized loss on derivatives.

Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess:

•: the financial performance of our assets without regard to financing methods, capital structure, income taxes or significant non-cash expenses;
•: our operating performance and return on invested capital compared to those of other publicly traded limited partnerships, without regard to financing methods and capital structure;
•: our ability to generate cash sufficient to make distributions to our unitholders; and
•: our ability to incur and service debt and to fund capital expenditures.

		Historical											Unaudited Pro Forma Consolidated

		Year Ended December 31,											Unaudited Pro Forma Consolidated
		Year Ended December 31,											Year Ended December 31,
		2011		2010			2009			2008			2011
		(dollars in millions)
Reconciliation of Net income (loss) to Adjusted EBITDA:
Net income (loss)		$	21.9	$	(39.7	)	$	(4.5	)	$	(4.0	)	$	12.9
Plus:
	Interest expense and amortization of deferred financing costs		17.9		5.4			0.8			—			28.9
	Income tax expense		1.4		—			—			—			1.4
	Depreciation, amortization and accretion		37.5		7.2			0.1			—			37.5
	Equity-based compensation expense		64.4		14.5			—			2.0			64.4
	Unrealized loss on derivatives		1.7		—			—			—			1.7

	Adjusted EBITDA	$	144.8	$	(12.6	)	$	(3.6	)	$	(2.0	)	$	146.8

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition, results of operations and cash flows in conjunction with our financial statements and related notes included elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including, but not limited to, those set forth under "Risk Factors," "Cautionary Note Regarding Forward-Looking Statements" and elsewhere in this prospectus.

We own and operate the world's largest "on-purpose" PDH facility, based on production capacity, which uses propane as a feedstock to produce propylene. Our facility is situated on the site of a former ethylene cracker we acquired from ExxonMobil in March 2008. We believe our position as the only independent on-purpose propylene producer in the U.S. gives us a competitive advantage in attracting and retaining customers. We commenced operations in October 2010 and, after an approximately year-long start-up and plant optimization phase, achieved production rates at or near current capacity beginning in December 2011.

We currently have multi-year contracts for the sale of our propylene with The Dow Chemical Company ("Dow"), Total Petrochemicals USA, Inc. ("Total"), BASF Corporation ("BASF") and INEOS Olefins and Polymers USA ("INEOS") that expire between 2013 and 2018 and a one-year contract with LyondellBasell Industries N.V. ("LyondellBasell") that ends in December 2012. The contracts provide for minimum and maximum offtake volumes, with the minimum customer-contracted volumes representing approximately 75% of our current facility capacity and the maximum reflecting approximately 100% of our current facility capacity. Each of our customer contracts contain pricing terms based upon market rates. We have supplied and will continue to opportunistically supply other propylene consumers on a spot basis when permitted by both operational and market conditions. During 2011, our three largest customers accounted for approximately 95% of our total sales.

In addition to propylene, we also produce commercial quantities of hydrogen and C4 mix/C5+ streams. The sales of these products represented approximately 2% of total sales in 2011, and do not represent a material part of our production. Accordingly, we have one operating segment.

Our historical results of operations and cash flows are not indicative of results of operations and cash flows to be expected in the future, principally for the following reasons:

We believe key factors that influence our business and impact our operating results are (1) the propane-to-propylene spread, (2) our facility's capacity utilization and (3) our propane-to-propylene conversion factor.

The price spread between propane, our sole feedstock, and propylene, our primary product, largely determines our gross margin and is the key driver of our profitability.

Propylene sales constitute substantially all of our sales. Propylene is a commodity, and its price can be cyclical and highly volatile. The price of propylene depends on a number of factors, including general economic conditions, cyclical trends in end-user markets and supply and demand imbalances. The customers under our propylene sales contracts, (Dow, Total, BASF, INEOS and LyondellBasell) each pay market-based prices for propylene, and a significant decrease in propylene prices would have a material adverse effect on sales generated from these customers. In addition, a decrease in the price of propylene would result in decreased sales from any sales of propylene on the spot market. For example, propylene prices fell significantly in the fourth quarter of 2011, which adversely affected our cash flows and results of operations.

Propane is the sole feedstock in our production process, and the cost of propane represents a substantial portion of our cost of sales. Enterprise supplies 100% of our required propane feedstock volume under a multi-year contract at market-based prices, which prices are subject to fluctuations in response to changes in supply, demand, market uncertainties and a variety of additional factors beyond our control. See "—Quantitative and Qualitative Disclosures about Market Risk."

Our facility has a current production capacity of approximately 1.45 billion pounds of propylene. Actual annual production will vary based on a number of factors, including the amount of downtime for planned and unplanned maintenance on the facility. Excluding planned major maintenance projects, we anticipate that our PDH facility will operate at an average capacity utilization rate of approximately 90% on an annual basis. Any significant planned or unplanned downtime will affect not only production, and therefore sales, but also capital expenditures and direct operating expenses, primarily maintenance expenses, and fuel and utilities. A 91% average capacity utilization rate equates to an average daily propylene production of approximately 3.6 million pounds.

An important contributor to profitability is our propane-to-propylene conversion factor, which is a ratio that indicates how much propane is used to produce one pound of propylene. We expect to have an

average monthly propane-to-propylene conversion factor of 1.0 pound of propylene for each 1.2 pounds of propane used. This important statistic reflects our facility's operating efficiency.

In addition to utilizing the key factors affecting our operating results described above to evaluate our performance, our management uses certain additional financial and operational measures as well. These measures include Adjusted EBITDA and health, safety and environmental performance.

We view Adjusted EBITDA as an important indicator of cash flow generation. Adjusted EBITDA is principally affected by our sales volumes, the propane-to-propylene spread, capacity utilization, propane-to-propylene conversion factors and, to a lesser extent, the prices of natural gas and our by-products. Other than the cost of propane and natural gas, production-related expenses generally remain stable across broad ranges of throughput volumes, but can fluctuate significantly depending on the planned and unplanned maintenance performed during a specific period. Our Adjusted EBITDA and available cash may not always correlate to each other.

We consider our ability to manage our facility and customer needs in a safe and reliable manner to be a critical factor in assessing our performance. Accordingly, we have an extensive training program and set annual goals on achieving operating performance and safety measures that assure the reliable operation of our facility and a safe working environment for our employees. Further, we closely monitor all environmental metrics to assure compliance with all regulatory requirements and that we operate in an environmentally responsible manner.

The period-to-period comparisons of our results of operations have been prepared using the historical periods included in our financial statements. In order to effectively review and assess our historical financial information below, we have also included a description of the components of the various financial statement line items.

Sales. Sales are comprised of propylene sales and by-product sales, which include hydrogen and C4 mix/C5+ streams.

Cost of Sales. Cost of sales represents the costs of propylene and by-products sold. These costs include the cost of propane, fuel and utilities used in the propylene production process, as well as direct operating expenses and insurance and property tax expenses associated with our facility. Direct operating expenses include all direct and indirect labor at our facility, materials, supplies, and other expenses associated with the operation and maintenance of the facility. Depreciation, amortization and accretion expenses, exclusive of amortization of deferred financing fees, are also included within cost of sales. During periods in which our facility operates below normal capacity, we record charges to cost of sales to reflect unabsorbed fixed overhead costs.

General and Administrative Expense. General and administrative expense includes salary and benefits costs for executive management, accounting and information technology personnel, as well as legal, audit, tax and other professional service costs and charges for equity-based compensation expense. In 2011, a portion of these costs were billed to us by an affiliated company pursuant to the former services agreement. As of January 1, 2012, these services are provided by our general partner. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of Our General Partner—Former Services Agreement."

Management Fee. Management fee consists of the expense incurred through our management services agreement with Lindsay Goldberg. This agreement terminates upon the occurrence of various conditions including an initial public offering. As such, this agreement will terminate upon closing of this offering.

Loss on Derivatives. Our derivative contracts are recorded as derivative assets and liabilities, as applicable, at fair value on the balance sheet. Our derivative contracts do not qualify for hedge accounting treatment. Consequently, the associated unrealized gains and losses are recorded as current expense or income in the statement of operations. Unrealized gains or losses on derivatives represent the non-cash change in the fair value of these derivative instruments and do not impact operating cash flows until settlement occurs in 2012 and 2013.

Interest Expense, Net. Interest expense includes expense incurred on outstanding debt balances, the amortization of deferred financing fees and loan commitment expenses under our prior credit facility. Loan commitment expense is comprised of the fees assessed on the unutilized portion of our credit facility. Interest income results from earnings on available cash balances and is offset against interest expense.

Other Income. Other income has historically been generated through the sale of certain equipment.

Income Tax Expense. As an entity operating in the State of Texas, we are subject to the Texas Margin Tax. This tax represents a tax on gross margin, as adjusted, and is reported as income tax expense in the accompanying statements of operations.

	Year Ended December 31,

	2011			2010			Increase/Decrease
	(Unaudited)									%
	(Amounts in thousands)
Sales	$	614,927		$	30,351		$	584,576			1,926
Cost of sales		496,809			41,836			454,973			1,088

Gross profit		118,118			(11,485	)		129,603
General and administrative expense		73,365			22,884			50,481			221
Management fee		2,000			—			2,000			N/A
Loss on derivatives		1,667			—			1,667			N/A

Operating income (loss)		41,086			(34,369	)		75,455
Interest expense, net		(17,853	)		(5,418	)		(12,435	)		230
Other income		63			52			11			21

Net income (loss) before income tax expense		23,296			(39,735	)		63,031
Income tax expense		(1,372	)		—			(1,372	)		N/A

Net income (loss)	$	21,924		$	(39,735	)	$	61,659

Sales. We commenced operations in October 2010 and we achieved production rates at or near current capacity beginning in December 2011.

	Year Ended December 31,

	2011			2010			Increase/Decrease
	(Unaudited) (Amounts in thousands)								%
Propane	$	361,035		$	30,540		$	330,495		1,082
Fuel and utilities		40,923			5,747			35,176		612
Depreciation, amortization and accretion		37,529			7,171			30,358		423
Insurance and property taxes		9,813			1,146			8,667		756
Direct operating expenses and other		51,686			7,546			44,140		585

Total production costs		500,986			52,150			448,836
Change in product inventory		(4,177	)		(10,314	)		6,137		60

Cost of sales	$	496,809		$	41,836		$	454,973		1,088

Cost of sales was $497 million, or approximately 81% of sales, for 2011. The primary component of cost of sales is the propane feedstock, which represented approximately 72% of total production costs for 2011 compared to 59% in 2010. This increase is due to a full year of production in relation to the fixed cost components of cost of sales which do not vary with production. Other variable production costs such as fuel and utilities and direct operating expenses increased due to a full year of operations in 2011 as compared to 2010. We did not begin recording depreciation and amortization expense on the facility until October 2010. Insurance and property taxes increased $8.7 million in 2011 as compared with 2010 due to increased insurance premiums and an increase in the assessed taxable value of the facility. The production costs reflected in the table above were incurred during the period indicated. The change in inventory represents the change in the value of the product inventory between the beginning and end of the period based on the weighted average cost of production.

General and Administrative Expense. General and administrative expense was $73.4 million for 2011, compared to $22.9 million for 2010, an increase of $50.5 million. The increase is attributable to equity-based compensation expense of $64.1 million in 2011, compared to $14.0 million in 2010. Equity-based compensation expense resulted from equity-based awards granted in September 2010 to both our employees and certain employees of affiliated entities, who are treated for accounting purposes as non-employees.

Management Fee. We incurred management fees of $2.0 million for the year ended December 31, 2011, compared to zero in 2010. The management fees relate to a management services agreement, pursuant to which we pay Lindsay Goldberg a total of $2.0 million per year beginning in 2011. This agreement and related management fees will be terminated at the closing of this offering.

Interest Expense, Net. Interest expense of $13.3 million was incurred in 2011, on an average daily debt balance of $166.7 million. During 2010, the average daily debt balance was $137.3 million, resulting in interest charges of $11.0 million for 2010, of which $8.3 million was capitalized as part of construction costs. Total interest expense, net in 2011 also includes $3.1 million of deferred financing cost amortization. During 2010, we recorded amortization of deferred financing costs of $3.1 million, of which we capitalized $2.5 million. The interest rate remained unchanged at 8% during 2011 and 2010.

Loan commitment expense for 2011, was $1.4 million, a decrease of $0.7 million from 2010. The decrease was largely due to the construction loan commitment being fully drawn upon in the first half of 2011. The only loan commitment expense we incurred in 2011 was on our prior revolving credit facility.

Other Income. Other income was generated by the sale of certain equipment.

Income Tax Expense. Income tax expense was $1.4 million for 2011, compared to zero for 2010, resulting from the Texas Margin Tax.

	Years Ended December 31,

	2010			2009			Increase/Decrease
	(Amounts in thousands)									%
Sales	$	30,351		$	—		$	30,351			N/A
Cost of sales		41,836			—			41,836			N/A

Gross loss		(11,485	)		—			(11,485	)		N/A
General and administrative expense		22,884			4,264			18,620			437

Operating loss		(34,369	)		(4,264	)		(30,105	)		706
Interest expense, net		(5,418	)		(224	)		(5,194	)		2,319
Other income		52			—			52			N/A

Net loss	$	(39,735	)	$	(4,488	)	$	(35,247	)		785

Sales. The facility commenced operations in October 2010. Accordingly, financial statements for 2009 reflect neither sales nor cost of sales, and the financial statements for 2010 reflect the operations of the facility during the period beginning on the date when we commenced commercial operations in October 2010 to December 31, 2010.

During that period, the facility's operations were periodically suspended in connection with routine start-up and other maintenance activities. Accordingly, we were unable to fully absorb fixed overhead costs, and we reported a negative gross profit.

	Years Ended December 31,

	2010			2009		Increase/Decrease
	(Amounts in thousands)								%
Propane	$	30,540		$	—	$	30,540			N/A
Fuel and utilities		5,747			—		5,747			N/A
Depreciation, amortization and accretion		7,171			—		7,171			N/A
Insurance and property taxes		1,146			—		1,146			N/A
Direct operating expenses and other		7,546			—		7,546			N/A

Total production costs		52,150			—		52,150			N/A
Change in inventory		(10,314	)		—		(10,314	)		N/A

Cost of sales	$	41,836		$	—	$	41,836			N/A

Cost of sales was $41.8 million, or approximately 138% of sales for 2010. The commencement of operations in October 2010 was followed by several months of routine start-up and other maintenance activities. Accordingly, we were unable to fully absorb fixed overhead costs, and we recorded a negative gross profit. The primary component of cost of sales is the propane feedstock, which represented approximately 59% of total production costs in 2010.

The production costs reflected in the table above were incurred during the period indicated. The change in inventory represents the change in the value of product inventory between the beginning and end of the period based on the weighted average cost of production.

General and Administrative Expense. General and administrative expense was $22.9 million for 2010, compared to $4.3 million for 2009, an increase of $18.6 million. Equity-based compensation expense, as a component of general and administrative expense, was $14.0 million in 2010 resulting from equity-based awards granted in September 2010 to both employees and non-employees compared to an insignificant amount for 2009. Also, as part of the transition of the facility from development stage, management added accounting and information systems support personnel and accounting, systems and tax consultants,

resulting in increases of $1.5 million and $1.1 million, respectively. Legal fees increased by $0.5 million, and other expenses increased by $1.5 million.

Interest Expense, Net. We entered into a five-year credit facility agreement in June 2009, which included a $150 million secured construction loan commitment and a $55 million revolving credit facility. We did not draw upon the construction loan commitment until the end of October 2009. The average construction loan balance from that point until December 31, 2009, was $61.1 million, resulting in interest expense of $0.9 million for the year, all of which was capitalized as part of construction costs. Interest expense in 2009 includes $0.8 million of loan commitment fees on the unutilized portion of our credit facility. Interest income of $0.6 million was earned during 2009 on cash balances.

During 2010, the average construction loan balance was approximately $132 million, resulting in interest of $10.5 million for the year, of which $8.3 million was capitalized as part of construction costs. The increase in total interest of $9.7 million on the construction loan from 2009 to 2010 was primarily the result of the higher level of borrowing due to the capital spending on the facility construction. The interest rate remained unchanged at 8% during 2010 and 2009. No significant interest income was earned in 2010.

The revolving loan commitment was not drawn upon until August 2010. Accordingly, there was no interest expense on the revolving loan during 2009. The average revolving loan balance from August 2010 to December 31, 2010, was $14.5 million, resulting in interest of $0.5 million for 2010.

Loan commitment expense increased $1.3 million to $2.1 million in 2010 due to the bank debt facility being in place for the full year. Also, during 2010, we recorded amortization of deferred financing costs of $3.1 million, of which we capitalized $2.5 million. Amortization of deferred financing costs for the year ended December 31, 2009 totaled $0.5 million, all of which was capitalized.

Other Income. Other income resulted from the gain on sale of certain equipment.

The preparation of our financial statements in accordance with GAAP requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. The following is a discussion of the accounting policies applied by us that are considered to involve a higher degree of judgment in their application. See Note 2 (Summary of Significant Accounting Policies) to our audited financial statements included elsewhere in this prospectus.

We account for the impairment of long-lived assets in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, "Plant, Property and Equipment—Impairment or Disposal of Long-Lived Assets." Long-lived assets used in operations are assessed for possible impairment when events or changes in circumstances indicate a potential significant deterioration in future cash flows projected to be generated by the assets. Individual assets are grouped for impairment purposes at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets—generally at the facility level, as we produce one primary product.

If, upon review, the sum of the projected undiscounted cash flows is less than the carrying value of the asset group, the carrying value is written down to estimated fair value. The fair values of impaired assets are usually determined based on the present value of projected future cash flows using discount rates commensurate with the risks involved in the asset group, as quoted market prices in active markets are generally not available. The expected future cash flows used for impairment reviews and related fair value calculations are based on projected production volumes, sales volumes, prices, and costs, taking into consideration available internal and external information at the date of review.

Should an impairment of assets arise, we may be required to record a charge to operations that could be material to the period reported. To date, we have not recorded any impairment charges.

In October 2011, we entered into commodity derivative contracts with settlement dates in 2012 and 2013 to manage our exposure to commodity price risk with respect to propane, our sole feedstock. Our principal use of commodity derivative contracts is to mitigate the risk associated with unfavorable market movements in the price of energy commodities. Our commodity derivative contracts act as a hedging (offset) mechanism against the volatility of energy commodity prices by allowing us to transfer this price risk to counterparties who are able and willing to bear it.

FASB ASC Topic 815, "Derivatives and Hedging" ("ASC Topic 815"), addresses the accounting for derivative contracts. We entered into our commodity derivative contracts to economically hedge an exposure through a relationship that does not qualify for hedge accounting under ASC Topic 815. Our derivative contracts are recorded as derivative assets and liabilities, as applicable, at fair value on the balance sheet, and the associated unrealized gains and losses are recorded as current expense or income in the statement of operations. Unrealized gains or losses on derivatives represent the non-cash change in the fair value of these derivative instruments and do not impact operating cash flows on the cash flow statement. Until settlement occurs, this will result in non-cash gains or losses being reported in our operating results as gain or loss on derivatives. See Note 6 to our audited financial statements included elsewhere in this prospectus.

Contemporaneous with the closing of this offering, we will enter into an omnibus agreement with our general partner, Propylene Holdings, PL Manufacturing and owners of PL Manufacturing (or the "PL Manufacturing Members"), which includes our sponsors and certain of our general partner's employees and executive officers, pursuant to which the PL Manufacturing Members, through our general partner, will be allocated all of our benefits and obligations under the propane swaps. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner—Omnibus Agreement." Under the omnibus agreement, any amounts received by us under the propane swaps will be distributed, through our general partner, to the PL Manufacturing Members, and any amounts that we are required to pay under the propane swaps are expected to be contributed back to us as a capital contribution by the PL Manufacturing Members.

We recognize equity-based compensation expense related to the profits interests granted to employees based on the estimated fair value of the awards on the grant date. The grant date fair value of the equity-based awards to employees is recognized on a straight-line basis over the requisite service period, which is the vesting period of the respective awards.

We also account for profits interests granted to certain employees of affiliated entities, who are treated for accounting purposes as non-employees, based on the estimated fair value of the awards. The measurement of equity-based compensation for awards granted to non-employees is subject to periodic adjustment as the awards vest, and the resulting change in value, if any, is recognized in our statements of operations during the period the related services are rendered.

We engage an independent valuation specialist to assist us in determining the fair value of the awards as of the grant date for employees, and as of each reporting date for non-vested awards for non-employees. Through March 31, 2011, the fair value of our profits interests was estimated using the Option Pricing Method ("OPM") because the OPM is appropriate when the range of possible outcomes is so difficult to predict that forecasts would be highly speculative. Beginning in the second quarter of 2011, our view of the scenarios available to our sponsors to achieve a return on their investment changed substantially. As a result, as of June 30, 2011, we determined that restructuring our business through an initial public offering as a master limited partnership was the most likely scenario. Therefore, the valuation assumptions used to estimate the fair value of the profits interests were changed to reflect the change in our view in the second quarter. We estimated the fair value of the profits interests using a hybrid method considering a probability

weighting between (i) a delayed exit scenario, where we estimated the fair value of the profits interests using the OPM, and (ii) an expected initial public offering scenario, in which we effect an initial public offering as a master limited partnership, and which is largely based on comparable company valuations. These valuation methods require the use of highly subjective and complex assumptions that determine the fair value of equity-based awards, including the equity value of our business and the expected time to liquidity, volatility, risk-free interest rate and dividend yield.

Given the absence of a public trading market for our common units and in accordance with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the equity value of our business, including: comparable company valuations, publicly available forecasts of future propylene and propane prices that are published by industry sources as of each valuation date; contemporaneous and retrospective valuations performed by an independent valuation specialist; the status of our facility's construction and operations, including risks attendant thereto; the likelihood of our achieving a liquidity event given prevailing market conditions in the estimated timeframe; the nature, history and strategy of our business; the illiquidity of equity-based awards involving private company securities; and current expectations about future macroeconomic conditions.

In the latter part of 2010 and in the year ended December 31, 2011, our estimates of future results, and therefore, our estimates of the equity value of our business, have increased substantially as a result of (1) the completion of the construction of our facility, (2) significantly higher expectations of future profitability based on increases in the forecasted propane-to-propylene spread, and (3) the anticipated restructuring of our business as a publicly traded master limited partnership.

For a further discussion of our historical equity-based compensation, please see Notes 2 and 11 to our audited financial statements included elsewhere in this prospectus.

Our principal sources of liquidity historically were equity contributions from our sponsors and borrowings under our prior credit facility. Beginning with the commencement of our operations in October 2010, our principal source of liquidity is cash flows from operations. Our principal uses of cash are expected to be operations, distributions, capital expenditures and funding our debt service obligations. We believe that our cash from operations will be adequate to satisfy commercial commitments for the next twelve months and that the borrowings under our new revolving credit facility will be adequate to fund our planned capital expenditures and working capital needs.

Our ability to make payments on and to refinance our indebtedness, to make distributions, to fund planned capital expenditures and to satisfy our other capital and commercial commitments will depend on our ability to generate cash flow in the future. This, to a certain extent, is subject to the prevailing propane-to-propylene spread, natural gas prices and general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us under our new credit facilities in amounts sufficient to enable us to make quarterly distributions, finance necessary capital expenditures, service our indebtedness or fund our other liquidity needs. We may seek to sell assets or issue debt securities or additional equity securities to fund our liquidity needs but may not be able to do so. We may also need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness on commercially reasonable terms or at all.

We entered into a five-year credit facility agreement in June 2009 that included a $150.0 million construction loan commitment and a $55.0 million revolving credit facility (the "prior credit facilities").

Interest for the facility was based upon LIBOR plus a margin or the bank's prime rate plus a margin, at our option. All of our obligations under the credit facility were secured by all of our assets, subject to certain exceptions and exclusions. Additional information about the prior credit facility may be found in Note 9 to our audited financial statements included elsewhere in this prospectus. On March 27, 2012, we refinanced and canceled this credit facility with borrowings under our new term loan facility.

On March 27, 2012, PL Propylene, as borrower, entered into a new term loan facility of $350.0 million and a new revolving credit facility of $120.0 million with Morgan Stanley Senior Funding, Inc., as sole lead arranger, and the lenders party thereto (together, the "new credit facilities"). Morgan Stanley Senior Funding, Inc. (the "Agent") will act as the administrative agent, collateral agent and swingline lender for both the term loan facility and the revolving credit facility.

The new term loan facility and the new revolving credit facility will mature in 2017 and 2016, respectively. As described under "The Transactions and our Structure and Organization," we drew $350.0 million under the new term loan facility and used (1) $60.8 million to refinance and cancel our prior credit facility, (2) approximately $250.0 million to reimburse our sponsors for construction capital expenditures and (3) approximately $16.5 million to pay associated financing costs and debt discounts. We will use the remaining amount (approximately $22.7 million) for general working capital purposes, of which approximately $1.5 million will be used to pay remaining unpaid transaction costs in connection with this offering. To date, we have not drawn any amounts under our new revolving credit facility. Borrowings under our revolver may be used to fund our working capital needs and for other general partnership purposes, and will be subject to the satisfaction of customary conditions, including the absence of a default, and the accuracy, in all material respects, of all representations and warranties. We have posted a $40 million letter of credit as collateral for our commodity derivative contracts. We will also have the right to add, subject to certain restrictions and conditions, incremental term loan and revolving credit facilities in an amount not to exceed $200.0 million.

Interest Rate and Fees. Borrowings under the term loan facility and revolving credit facility will bear interest at a rate per annum equal to either: (1) the Alternate Base Rate, defined as the highest of (a) the rate of interest publicly announced by the Agent, from time to time, as its prime rate, (b) the federal funds effective rate from time to time plus 0.50% per annum and (c) in respect of the term loan facility only, one-month LIBOR plus 1.00% per annum, plus an applicable margin OR (2) the higher of (a) at the election of PL Propylene, one, two, three, six, or, if available to all relevant affected lenders, nine or twelve month (or shorter) published LIBOR or (b) in respect of the term loan facility only, 1.25% per annum, plus an applicable margin. Additionally, we expect that the revolving credit facility will bear a commitment fee calculated at a rate per annum equal to 0.50% on the average daily unused portion of the commitments under the revolving credit facility.

The applicable margin for the term loan facility and the revolving credit facility ranges from 4.75% for loans bearing interest at the Alternate Base Rate to 5.75% for loans bearing interest at LIBOR and for letters of credit issued under the revolving credit facility. In addition, PL Propylene will pay an underwriter fee and an upfront fee as well as an annual management fee for our term loan facility and our revolving credit facility. We will be required to pay a participation fee and a fronting fee to lenders participating in any letter of credit.

Mandatory Prepayments. We will be required to prepay outstanding amounts under our term loan facility in an amount equal to the net proceeds from certain issuances of debt (other than debt permitted to be incurred under the facility). We will also be required to prepay outstanding amounts under our term loan facility in an amount equal to the net proceeds from any non-ordinary course asset sale or from any casualty or other insured damage or any condemnation of any asset, subject to certain thresholds, exemptions and reinvestment rights.

Voluntary Prepayments/Commitment Reductions. We expect that we may voluntarily terminate or reduce the commitments under our new credit facilities or voluntarily prepay, in whole or in part, outstanding amounts under our new credit facilities without premium or penalty; provided, (i) on or prior to the first anniversary of the closing date, we may not prepay, refinance or reprice the term loan facility, (ii) subsequent to the first anniversary of the closing date and on or prior to the second anniversary of the closing date, we may be subject to a 2% premium for prepaying, refinancing or repricing the term loan facility and (iii) subsequent to the second anniversary of the closing date and on or prior to the third anniversary of the closing date, we may be subject to a 1% premium for prepayment, refinancing or pricing of the term loan facility.

Amortization and Final Maturity. The new term loan facility will be amortized in aggregate amounts of 0.25% per fiscal quarter of the original principal amount and will mature on the fifth anniversary of the closing date. The revolving credit facility maturity date is September 27, 2016, at which time the revolving credit facility will terminate.

Restrictive Covenants and Other Matters. Our new credit facilities include negative covenants that will, subject to significant exceptions, limit our ability and the ability of our sole subsidiary, PL Propylene, to, among other things:

The credit facilities contain certain customary representations and warranties, affirmative covenants and events of default.

Each of the following, could constitute an event of default under the agreement governing our new credit facilities:

If an event of default occurs, the Agent would be entitled to take various actions, including the acceleration of amounts due under the new credit facilities, termination of the commitments under the new revolving credit facility and all remedial actions available to a secured creditor.

During the year ended December 31, 2011, we incurred capital expenditures of $28.5 million primarily for plant modifications that are expected to improve the operating efficiency of our facility.

In 2010, we incurred $187.5 million of capital expenditures to complete the construction of our PDH facility which commenced operations in October 2010.

Major planned turnaround costs will be deferred and amortized from the period incurred until the next turnaround. Certain capital expenditures are for discretionary projects. Our new term loan facility may limit the amount we can spend on capital expenditures.

Our future capital spending will be determined by the board of directors of our general partner. We currently plan to incur capital expenditures of $47.9 million in 2012, $34.1 million during 2013 and approximately $7.7 million for 2014. We have not planned capital expenditures beyond 2014. We expect to undergo a major maintenance project in the second half of 2013, at which time the most significant activity will be to replace the reactor catalyst, which is required approximately every three years. Capital spending during 2012 includes approximately $6.5 million associated with progress payments for the purchase of the reactor catalyst in preparation for the 2013 major maintenance project. The remaining $41.4 million of capital spending in 2012 consists of approximately $5.2 million of maintenance capital expenditures, approximately $17.7 million of profit enhancing capital expenditures and approximately $18.5 million of acquisitions and plant expansion capital expenditures. During 2013, we expect to incur approximately $6.8 million associated with remaining progress payments for the purchase of the reactor catalyst and an additional $15 million in capital spending in connection with the catalyst replacement project. We expect these catalyst change-out projects will typically cost approximately $25 million to $30 million per project. In addition to the triennial maintenance projects, a more significant maintenance project will be undertaken approximately every nine years, which will include change-out of the reactor catalyst and overhauls of selected pieces of equipment. We anticipate these projects to cost approximately $35 million to $45 million.

Our estimated capital expenditures and planned major maintenance costs are subject to change due to unforeseen circumstances and unanticipated increases in the cost, scope and completion time. For example, we may experience increases in labor or equipment costs necessary to comply with government regulations or to complete projects that sustain or improve the profitability of our PDH facility.

Maintenance capital expenditures and planned turnaround expenses will be funded using cash flow from operations. Other capital expenditures (including acquisitions and plant expansion capital expenditures), should we identify opportunities for such expenditures, may be funded using cash flow from operations or, if significant, will be funded by issuances of debt or equity. In addition to the capital costs associated with planned major maintenance or expansion projects at our facility, our production will be reduced during any period in which our facility is not operating. Our board of directors may elect to reserve amounts in the period(s) preceding such project(s) to fund the estimated capital costs, operating expenses and distributions for the lost margin associated with the loss of production in the period in which

the project(s) are expected to occur. The actual costs and lost margin associated with such project(s) may, however, differ from the estimated amounts reserved.

We intend to use the proceeds from this offering and cash on hand to fund certain future capital expenditures at our facility, including a portion of those associated with our planned major maintenance project in 2013 and to fund a portion of the distributions for the lost margin resulting therefrom. We also intend to reserve any additional amounts needed to fund the remaining estimated capital costs and distributions for the lost margin associated with the loss of production during the periods leading up to the 2013 major maintenance project.

Net cash provided by operating activities for the year ended December 31, 2011, was $84.6 million. This positive cash flow from operating activities was primarily attributable to net income of $21.9 million plus non-cash charges totaling $107.5 million, which include equity-based compensation expense, depreciation, amortization and accretion expense as well as amortization of deferred financing costs, unrealized loss on derivatives and deferred income tax expense, reduced by an increase in restricted cash of $28.0 million and an increase in working capital of $16.8 million. The increase in restricted cash included the establishment of a major maintenance reserve of $3.0 million as required by our prior credit facility.

Net cash used in operating activities for the year ended December 31, 2010, was $53.2 million. This negative cash flow from operating activities was primarily attributable to increases in accounts receivable and inventory and a decrease in accounts payable combined with our loss from operations.

Net cash flows provided by operating activities for the year ended December 31, 2009 were insignificant, due primarily to our net loss offset by changes in the components of working capital.

Net cash used in investing activities for the year ended December 31, 2011, was $28.5 million. Net cash used in investing activities relates to capital expenditures for our facility.

Net cash used in investing activities for the years ended December 31, 2010 and 2009 was $157.4 million and $281.2 million, respectively. Net cash used in investing activities relate to capital expenditures in connection with construction of our facility.

Net cash used in financing activities for the year ended December 31, 2011 was $56.1 million. Our negative cash flows from financing activities were primarily due to the net repayment of $44.4 million on our prior revolving credit facility and term loan during the year ended December 31, 2011 as well as the establishment of a debt service reserve of $10.9 million as required by our prior credit agreement. We also incurred $3.2 million in deferred financing costs primarily related to this offering, and we received member contributions of $2.3 million during the year ended December 31, 2011.

Net cash provided by financing activities for the years ended December 31, 2010 and 2009, was $210.7 million, and $249.1 million, respectively. Net cash provided by financing activities resulted from proceeds from member capital contributions and proceeds from debt borrowings under our prior credit facility.

The following table sets forth our contractual obligations for the periods indicated as of December 31, 2011:

	Payments Due by Period

	Total		2012		2013		2014		2015		2016		There- after
	(in millions)
Bank Debt⁽¹⁾	$	145.1	$	145.1	$	—	$	—	$	—	$	—	$	—
Purchase Obligations⁽²⁾		8.9		1.9		1.9		0.6		0.7		0.7		3.1
Asset Retirement Obligations⁽³⁾		1.2		—		—		—		—		—		1.2
Lease Obligations⁽⁴⁾		1.3		0.2		0.2		0.2		0.2		0.2		0.3

Total	$	156.5	$	147.2	$	2.1	$	0.8	$	0.9	$	0.9	$	4.6

We do not have any "off-balance sheet arrangements" as such term is defined within the rules and regulations of the SEC.

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in financial and commodity market prices and rates. Given that our business is currently based entirely in the U.S., we are not directly exposed to foreign currency exchange rate risk.

Our business activities expose us to risks associated with unfavorable changes in the market price of propylene and propane. In October 2011, we began entering into propane swaps with the intent of reducing volatility in our cash flows due to fluctuations in the price of propane, our sole feedstock. Under the terms of the propane swaps, for a portion of our propane consumption, we locked in the price of propane as a fixed percentage of the price of Brent crude oil (the "contractual percentage"). Beginning in January 2012, and at the conclusion of each subsequent month, a calculation is performed to determine the average actual price of propane for that month as a percentage of the average actual price of Brent crude oil for that month (the "actual percentage"). If the actual percentage exceeds the contractual percentage under the propane swaps, we are owed a sum by the propane swaps counterparty. If the contractual percentage exceeds the actual percentage under the propane swaps, we owe a sum to the propane swaps counterparty.

Contemporaneous with the closing of this offering, we will enter into an omnibus agreement with our general partner, Propylene Holdings, PL Manufacturing and the PL Manufacturing Members, pursuant to which the PL Manufacturing Members, through our general partner, will be allocated all of our benefits and obligations under the propane swaps. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner—Omnibus Agreement." Under the omnibus agreement, any amounts received by us under the propane swaps will be distributed, through our general partner, to the PL Manufacturing Members, and any amounts that we are required to pay under the propane swaps are expected to be contributed back to us as a capital contribution by the PL Manufacturing Members. While we will not receive any of the benefits of the propane swaps, we will remain a party to the propane swaps, and will be obligated to make payments to the propane swap counterparties as they come due.

We expect that the PL Manufacturing Members will fund their payment obligations primarily through quarterly distributions that they receive on common units that they own. In connection with the omnibus agreement, the PL Manufacturing Members will pledge to PL Manufacturing (as collateral agent) a number of common units such that at all times, the market value of all pledged units is equal to or greater than 10 times the mark-to-market value of the propane swaps but in no event shall the number of pledged units be greater than the amount of units distributed to the PL Manufacturing Members in the Transactions. The expected aggregate quarterly distributions payable on all such pledged common units are expected to be sufficient to cover future payments under the propane swaps, plus an additional reserve. Upon the closing of this offering, the PL Manufacturing Members will pledge 100% of the common units owned by them even though the market value of all such pledged common units exceeds the amount required to be pledged under the omnibus agreement. PL Manufacturing will receive all quarterly distribution payments that we make in respect of any pledged units. Of this distribution amount, PL Manufacturing will (1) first, contribute to us an amount equal to the total sum of all payments made by us under the propane swaps during the quarter or owed by us at the end of the quarter, (2) second, establish and maintain a reserve as reasonably necessary and (3) third, distribute any excess cash to the PL Manufacturing Members.

See "Risk Factors—In the event that payments that we are required to make under our propane swaps exceed the contributions that we receive under our omnibus agreement, we may be exposed to significant losses and our ability to make cash distributions to our unitholders may be materially and adversely affected."

In connection with our new term loan facility, we expect to enter into certain interest rate protection agreements. Additionally, our management will continue to monitor whether financial derivatives become available which could effectively hedge identified risks. In the future, management may elect to use derivative financial instruments consistent with our overall business objectives to avoid unnecessary risk and to limit, to the extent practical, risks associated with our operating activities.

Propylene is a versatile basic hydrocarbon predominantly produced as a by-product of petroleum refining and as a co-product of ethylene production. Propylene is an important building block in the production of complex petrochemicals such as polypropylene, acrylonitrile and acrylic acid. As such, propylene is the foundation of many different consumer and industrial products such as plastics, clothing, automotive components, detergents, safety glass, packaging materials, paints and nylon. In addition to its utility within the chemicals market, propylene also plays a significant role in the fuels market. When alkylated in a refinery, propylene is used as a major gasoline blendstock.

Propylene pricing reflects supply and demand dynamics that are intricately related to the price movements of crude oil, natural gas and petrochemicals. Within North America, recent shale gas discoveries and the use of new extraction technologies have led to an abundance of natural gas and natural gas liquids ("NGLs") such as ethane and propane, significantly impacting U.S. petrochemical fundamentals including propylene production and pricing. In addition, there has been a fundamental decoupling of natural gas and oil prices in North America as gas prices have fallen dramatically while global economic and geopolitical factors have propelled oil prices to the $100 per barrel range. Given this dynamic, North American ethylene producers have shifted to lighter natural gas liquids as their primary feedstocks, which yield less propylene per pound of feed than heavy feedstocks such as naphtha. The result has been a tight supply of propylene in the North American market. We expect this trend to continue.

Propylene is produced globally primarily in regions containing crude oil refineries or an abundant supply of hydrocarbon feedstocks. The export and import of propylene between regions is relatively limited

due to the expense associated with transport of highly pressurized or refrigerated liquids. When sold, propylene is divided into grades based on final composition of the saleable product. There are three grades of propylene produced in the U.S.:

The following table depicts historical market prices of PGP and CGP during the period from 2005 through 2011 and projected 2012 through 2015:

Propylene is produced as a by-product in oil refineries when they process crude oil with the primary goal of creating gasoline. The first part of the refining process is to heat the crude oil to a very high temperature and feed it to a distillation column in which lighter distillates will rise as vapors and heavier distillates liquefy, thus separating the fractions. The fractions are further processed in a variety of ways, but it is the fraction sent to the FCC unit that has the capability to produce substantial amounts of propylene.

The FCC unit takes heavy gas oil as an input with the goal of producing gasoline and/or distillate fuel oil. The cat cracker "cracks" the bigger compounds in the heavy gas oil into smaller compounds. When the "cracked" product leaves the reaction chamber, it is separated in a dedicated fractionator. The products leaving the fractionator include a mix of heavy gas oil, light gas oil, gasoline and a gas stream. The gas stream is then further processed in a distillation tower to separate the gases into a propane/propylene mix, namely RGP.

Ethylene is the most commonly produced petrochemical in the world and Chemical Data estimates that over 50 billion pounds are produced annually in the U.S. Ethylene is a major building block for many common products. It is produced in an ethylene plant (also referred to as an olefins plant, ethylene cracker, steam cracker or a cracker defined by the feed type, such as "naphtha cracker" or "ethane cracker").

Ethylene can be produced by a variety of chemical reactions involving many different feedstocks, including ethane, propane, butane, naphtha or gas oil. Many ethylene plants in the U.S. are designed to shift between feedstocks as relative economics shift. Regardless of the feedstock, the basic process is the same: the feed is mixed with steam and heated to 750 to 950 degrees Celsius, inducing numerous free radical reactions followed by immediate cooling to freeze the reactions. The resulting output streams are separated from each other by repeated compression and distillation. The table below is illustrative of the relative production of propylene for the various feedstocks.

As is portrayed in the above table, ethylene crackers that crack primarily ethane will result in almost no co-product propylene generation, whereas crackers that use heavier feeds, such as naphtha or gas oil, referred to as heavy feed crackers, will result in more co-product propylene generation. While not all ethylene plants are able to shift between feed types, for the "flexible" crackers that are able to adjust, the choice of feedstock depends on a complex interaction of feedstock prices, as well as ethylene and co-product prices.

U.S. oil refineries and ethylene plants historically produced approximately equal relative amounts of propylene each year. Beginning in 2007, this relationship changed as two parallel events resulted in the permanent closure of various ethylene plants and the curtailment of refinery production, conditions that have led to an extremely tight propylene market.

First, new U.S. supplies of natural gas from liquid rich shale deposits have brought an abundant supply of natural gas and natural gas liquids into the U.S. market. As a result, the price of natural gas declined in a period of rising oil prices. This decoupling of the oil to gas price ratio has caused natural gas based feedstocks such as ethane to be favored versus crude oil based feedstocks such as naphtha for ethylene production. Accordingly, steam crackers that crack only naphtha or heavy oil based liquids have generally become economically cost disadvantaged. As a result, numerous heavy feed crackers have been permanently shut down or reconfigured to enable them to use lighter feedstocks. As a key supply source of propylene is from the steam cracking of heavy liquids, propylene production by ethylene plants has been reduced and is expected to remain so in the future, leaving the propylene market to remain tight.

The illustration below shows historical crude oil and natural gas pricing for the period from 2000 through 2011.

As illustrated below, the current high oil/low gas price environment has led to a significant shift from heavy feeds to ethane in the production of ethylene. As a result, the production of propylene as a co-product from ethylene crackers has decreased as shown in the chart on page 82.

The second event influencing U.S. propylene production has been the reduced demand for gasoline caused by the economic recession and subsequent slow recovery as well as the increased use of ethanol. A reduction in gasoline demand reduces refining operations, which in turn limits the by-product production of propylene. With reduced gasoline demand, refineries curtailed production and reduced FCC unit output. The combination of closures and reconfigurations of heavy feed ethylene crackers and reduced output of FCC units at refineries reduced annual U.S. propylene production by approximately 4 billion pounds from 2007 through 2011 according to Chemical Data estimates. Of that total, Chemical Data estimates that approximately 2 billion pounds of supply from ethylene plants was removed from the market, slightly offset by an increase in refinery capacity.

As illustrated below, propylene supply in the U.S. contracted sharply by 18.2% from 2007 through 2009 before rebounding 6.1% in 2010 according to Chemical Data estimates. Chemical Data also estimates that U.S. propylene supply will grow modestly from 2011 through 2015, increasing at a compound annual growth rate of approximately 0.3%. This is primarily due to the belief that co-product supply of propylene from heavy feed ethylene crackers is not likely to rebound in the near term. As mentioned earlier, overall production economics strongly favor lighter feedstocks, hindering the supply of propylene from ethylene crackers. In 2015, Chemical Data assumes that a new PDH plant is added to U.S. capacity, contributing to an annual supply growth rate that year of 1.6%. However, despite this growth, supply is expected to remain below levels achieved in 2005.

The following table depicts historical and projected propylene production in the U.S. for the period from 2005 through 2015.

Propylene demand in the U.S. has historically tracked GDP growth and was driven by increases in consumer consumption of both durable and non-durable plastics, nylon, insulation, furniture, carpets, appliances and adhesives, among other items. The recession that began in 2008 spurred the first worldwide contraction in propylene demand in history, and U.S. demand fell by 10.6% from 2007 to 2008. In early 2009, U.S. propylene demand continued to experience a contraction as a wide range of industries were affected by the global recession. Propylene demand growth resumed in the U.S. in late 2009 and 2010, before falling again in late 2011 over fears of another recession. Demand is expected to stabilize and recover in 2012, and Chemical Data forecasts that U.S. demand is expected to grow at a compound annual growth rate of approximately 1.0% between 2011 and 2015, with further growth somewhat constrained by the tight supply market.

The following graph shows historical and projected propylene demand in the U.S. for the period from 2005 through 2015.

As one of the primary petrochemical building blocks, propylene demand is driven by four key products: polypropylene, propylene oxide, acrylonitrile and acrylic acid. The following chart shows U.S. propylene demand by product in 2011.

Polypropylene (approximately 48% of propylene demand in 2011) is produced as a solid pellet that can be modified and molded into both hard and flexible plastic materials for both durable use (transportation, building and construction, electrical, furniture, industrial machinery) and non-durable use (packaging, consumer and industrial products). For example, a key use of polypropylene is in plastic component parts of automobiles. Chemical Data projects that U.S. polypropylene demand growth will be flat from 2011 through 2015.

Propylene oxide (approximately 14% of demand in 2011) is primarily used to produce foam and polyurethane products. It has historically been produced by one of two methods: reacting propylene with ethyl-benzene and by reacting propylene with isobutene. Chemical Data projects U.S. propylene oxide demand growth of approximately 2.4% per year from 2011 through 2015.

Acrylonitrile (approximately 9% of propylene demand in 2011) is used to produce synthetic rubber compounds, automotive body parts, golf club heads, clothing, carpet fibers, protective head gear, coatings and toys (LEGO® bricks). Asian manufacturers also import acrylonitrile from U.S. producers for use in the creation of nylon, among other items. Chemical Data projects U.S. acrylonitrile demand growth of approximately 2.0% per year from 2011 through 2015.

Acrylic acid (approximately 6% of propylene demand in 2011) is used to produce super-absorbents (for diapers), coatings, adhesives, floor polishes and paints. Chemical Data projects U.S. acrylic acid demand growth of approximately 2.5% per year from 2011 through 2015.

The price of propylene has always been closely related to the price of crude oil. The chart below illustrates the price ratio between propylene and crude oil over historical periods and shows that propylene trades at a premium to crude oil on a per barrel basis. This is because propylene is a by-product of refinery output and can be alkylated and used as a gasoline blendstock. Propylene's value outside of the chemicals market as a gasoline blendstock provides a floor for the price of propylene since gasoline always trades at a premium to crude oil.

Note: Propylene price expressed as a multiple of crude oil price on a dollar per barrel equivalent basis.

As depicted in the above chart, with the exception of the recession in 2008 and 2009, the price of propylene relative to crude oil has been fairly consistent over the past decade in a range between roughly 1.2 to 1.4 times the price of crude oil on an annual basis. As the alkylation value of propylene establishes the floor for propylene pricing, we believe the propylene benchmark price will seldom dip below crude oil. In fact, since 1990, the propylene benchmark price has not dipped below the crude oil price for a period longer than three months. Only twice since 1990 has the propylene benchmark price dropped below crude oil for a period longer than a month.

Management estimates that over 30 different companies produce propylene in North America. However, we do not consider most of these producers as our direct competition when seeking contractual or spot customers. First, refineries that produce refinery grade propylene are not direct competitors. Refinery grade propylene is generally sold to other companies, such as Enterprise and ExxonMobil, for further purification, or splitting, into PGP and CGP. Second, many producers, such as Dow, Formosa and INEOS, consume all of the propylene they produce and purchase significant additional volumes of propylene from third parties. We consider companies with net long positions in polymer and chemical grade propylene to be our direct competitors, including Enterprise, Chevron Phillips, ExxonMobil Chemical, Shell Chemical, Flint Hills and Williams Companies.

Most of our competitors have significantly greater financial and other resources than us and are engaged on a national or international basis in many segments of the petroleum products business including refining, transportation and marketing, on a scale substantially larger than ours.

Competition in our industry is determined by price considerations, logistics and, to some extent, stability of supply. Our ability to compete effectively depends on our responsiveness to customers' needs, our pipeline connectivity to customer facilities and our ability to provide reliable supply at competitive prices. We are the only independent dedicated on-purpose propylene production facility in North America. We believe this is a significant advantage because it enables us to provide customers a consistent, predictable supply offering that is not dependent on the prices of alternative feedstocks or other end products. However, it is possible that a competitor could construct an on-purpose propylene plant in future years and offer our customers similar capabilities.

International trade of propylene is limited due to the expense of transporting highly pressurized or refrigerated liquids. Most of the propylene trade crossing international borders is in the form of derivative chemicals, usually polypropylene or acrylonitrile. Historically, the U.S. has been the incremental supplier to the world. However, management expects that trend will likely move toward equilibrium in the near term due to two primary factors: (1) the shift to lighter feedstocks in the U.S. and the resulting reduction in propylene supply and (2) the increase in Middle Eastern and Asian production facilities. Middle Eastern propylene production capacity, once nearly non-existent, is experiencing growth as the region adds capacity through the construction of new crackers, refineries and on-purpose facilities. Management expects that incremental Middle Eastern production capacity will likely be more than offset by the growth in net propylene equivalent demand in Asia, despite that region's own capacity increases. As such, management expects that the North American propylene market will likely be driven by its own domestic supply and demand dynamics.

Propane, our sole feedstock, is a hydrocarbon that exists as a gas at atmospheric pressure and temperature. It is derived from petroleum products during oil and natural gas processing. U.S. propane production from gas processing plants comes in the form of natural gas liquids (a mix of ethane, propane and butane) and from refineries in the form of liquefied petroleum gas. The two primary U.S. uses for propane are retail (primarily heating in rural areas and as a motor fuel) and as a chemical feedstock (primarily in ethylene plants).

Propane supplies in the U.S. are derived from natural gas plants (approximately 54% in 2011), refineries (approximately 37% in 2011) and imports (approximately 9% in 2011).

Currently, the majority of propane in the U.S. is supplied by gas processing plants. When natural gas is produced, it is sometimes accompanied by NGLs such as ethane, propane and butane, as well as heavier hydrocarbons such as condensate. These liquids can be separated from the natural gas by either cooling or absorption and fractionation in gas processing plants. The recent increase in the supply of shale gas in North America has led to additional propane supply coming online with new NGL fractionation capacity. Chemical Data projects propane supply from U.S. gas processing plants will increase at a compound annual growth rate of 3.2% from 2011 through 2015.

According to Chemical Data, refinery produced propane is expected to grow at a relatively modest 0.3% compound annual growth rate over the same forecast period due to a reduced demand for gasoline. Almost all refinery processing units generate some volumes of propane, some of which is consumed on site as fuel at the refineries. Chemical Data also projects propane imports, most of which are from Canada, will decline slightly over the next four years as exporting countries seek higher prices in other markets.

Overall, propane supply in the U.S. is projected by Chemical Data to grow at a compound annual growth rate of 1.6% from 2011 through 2015. The below chart shows historical and projected propane supply in the U.S., broken out by source, for the period from 2005 through 2015:

The two primary U.S. uses for propane are retail (primarily heating in rural areas and as a motor fuel) and as a chemical feedstock for ethylene plants. Propane is also exported and, with the completion of our facility, used as a feedstock for PDH processing.

The use of propane as heating/motor fuel in the residential and commercial end-use sectors is currently the largest market for propane, totaling approximately 635 thousand barrels per day (bpd) and 57% of demand in 2011. Chemical Data expects that natural gas will increasingly replace propane in some rural areas, and therefore projects demand for propane for heating and motor fuel use to decline approximately 0.7% per year through 2015.

Propane consumption as an ethylene cracker feedstock is the second largest end use sector at approximately 31% of the total U.S. propane market in 2011. Ethylene cracker consumption is forecasted by Chemical Data to decline from approximately 350 thousand bpd in 2011 to 285 thousand bpd in 2015.

Exports are expected by Chemical Data to more than double from 123 thousand bpd in 2011 to 279 thousand bpd in 2015. Chemical Data expects that the surplus in propane production, primarily from gas processing plants and the shale gas developments, will encourage the development of export terminals. Overall, Chemical Data expects the U.S. to convert its current slight export balance into a net export position of approximately 190 thousand bpd by year-end 2015. The below chart shows historical and projected propane demand in the U.S., broken out by use, for the period from 2005 through 2015:

The price of propane has always been closely correlated to the price of crude oil. In general, propane trades at a discount to crude oil when compared on a per barrel basis. Propane trades at a discount to crude oil in part because the marginal consumer of propane is the flexible ethylene cracker. Flexible ethylene cracker operators constantly evaluate production costs of ethylene based on the price of each of their alternative feedstocks. Certain feedstock alternatives, like naphtha and natural gasoline, are crude oil based and have alternate uses in the gasoline market. However, these crude oil derived feedstocks do not contain the more valuable fractions of the crude barrel and they require significant further processing in order to be used as a gasoline blendstock. Thus, naphtha and natural gasoline trade at a discount to crude.

Since propane is an alternative ethylene cracker feedstock, flexible ethylene cracker operators continuously evaluate propane relative to the crude oil derived feedstock alternatives, creating a constant price competition between the various feedstocks. This causes the price of propane to trade in a band below the price of crude on a per barrel basis. Further, since the majority of propane is derived from natural gas production, its supply and price are partially a function of the rate of development of natural gas and the natural gas price. Natural gas supplies in the U.S. have increased due to shale gas development and gas prices have declined as a result. The low natural gas price has led producers to concentrate their development efforts on regions rich in natural gas liquids, such as ethane and propane, to capture additional profitability afforded by the sale of the liquids. This has led to (1) abundant supplies of both natural gas and propane, (2) a historically low gas price relative to the price of crude oil and (3) a decrease in the price of propane relative to the price of crude. The diagram below illustrates the effects of these dynamics on the historical price ratio between propane and crude oil.

Note: Propane price expressed as a multiple of Brent crude oil price on a dollar per barrel equivalent basis

The propane-to-propylene spread is the primary driver for our profitability. The figure below illustrates the relative price of propylene and propane to crude oil since the year 2000. Although the relationship between propane, crude oil and propylene is fairly consistent over time it is evident that the positive trends identified above have led to a widening of this spread recently.

Note: Propane and propylene price expressed as a multiple of Brent crude oil price on a dollar per barrel equivalent basis

In summary, several factors are contributing to the currently favorable propane-to-propylene spread. First, the growth in production from the shale gas formations with associated natural gas liquids (ethane, propane and butane), has led to increasingly abundant propane supplies in the U.S. This provides downward pressure on propane prices at a time when there is upward pressure on propylene prices due to

the tight propylene market. Second, the prices for both propane and propylene are correlated to the price of crude oil—propane trades at a discount to crude and propylene at a premium. The price of propane is also influenced by the price of natural gas from which it is derived. When the price of natural gas is low relative to the price of crude oil, as in the current environment, the price of propane will be lower relative to crude oil as well. Third, because the prices of propane and propylene are correlated to the price of crude oil, the differential between their prices is correlated to crude as well. Therefore a high absolute price of oil leads to a higher propane-to-propylene spread. Accordingly, the current high oil price, low natural gas price environment is a significant contributor to the widening of the propane-to-propylene spread. Because the propane-to-propylene spread is the primary driver of our gross margin, these trends are highly favorable to our profitability.

We own and operate the world's largest PDH facility, based on current production capacity, that processes propane into propylene. Propylene is one of the basic building blocks for petrochemicals that is utilized in the production of a variety of end uses including paints, coatings, building materials, clothing, automotive parts, packaging and a range of other consumer and industrial products. We are the only independent, dedicated "on-purpose" propylene producer in North America. We are strategically located in the vicinity of the Houston Ship Channel and within 50 miles of approximately one-half of all U.S. propylene consumption, and we have direct access to the leading global fractionation and storage hub for propane located at Mt. Belvieu, Texas. The Houston Ship Channel represents the heaviest concentration of petrochemical and refining complexes in the world and provides us with unparalleled access and connectivity to both customers and feedstock suppliers. Our newly-constructed facility has an annual production capacity of approximately 1.45 billion pounds of propylene. We commenced operations in October 2010 and, after an approximately year-long start-up and plant optimization phase, achieved production rates at or near current capacity beginning in December 2011.

Our facility was developed and built on the site of a former ethylene cracker and related infrastructure acquired from ExxonMobil in March 2008. This site was ideally suited for the development of a PDH facility based on its existing location, infrastructure, utilities, permits, logistics and certain operating units which we were able to integrate into our new facility. By leveraging these existing assets, we were able to save significant amounts of time and money versus those of a green-field PDH facility. Our PDH facility uses a CATOFIN dehydrogenation technology pursuant to a fully-paid license from CB&I Lummus. CATOFIN technology has been in use for over 60 years and is reliable and commercially proven. For more information about our state-of-the-art PDH facility, see "—Our Facility."

We derive our sales from three different sources: propylene sales, hydrogen sales and C4 mix/C5+ streams sales. Sales of these products are not subject to significant seasonal fluctuations. In general, we meet our customers' propylene requirements on a day-to-day basis. We may elect to store product to ensure a constant supply of propylene is available to our customers in the event of a temporary outage. For more information relating to the sales, assets, profits and losses of our business since inception, see the audited financial statements and our unaudited pro forma consolidated financial statements included elsewhere in this prospectus.

Since commencing operations, we have been party to long-term propylene sales contracts with Dow, Total, and INEOS, each of which use the propylene we supply in the largest acrylic acid, polypropylene and acrylonitrile plants, respectively, in the world. Each of these customers has a material net short position in propylene. Each contract details both minimum offtake volumes and maximum offtake volumes as well as pricing terms. As is customary in the propylene industry, our customer contracts are based on market prices. Consistent with industry practice for such contracts, our pricing terms with these customers reflect a specified discount to the monthly benchmark propylene price published by Chemical Market Associates, Inc. ("CMAI"). For the twelve months ended December 31, 2011, Dow, Total and INEOS accounted for 55%, 24% and 16% of our total sales, respectively. Effective January 1, 2012, we added BASF and LyondellBasell as additional contracted customers. Please see "Risks Related to Our Business—We currently derive substantially all of our sales from five customers, and the loss of any of these customers without replacement on comparable terms would affect our results of operations and cash available for distribution to our unitholders."

We deliver propylene to these customers through our integrated pipeline system, which directly connects our facility to the Dow and Total plants and the LyondellBasell system, and through interconnected third-party pipelines, which connect our facility to INEOS and BASF and to other potential propylene customers.

The following table illustrates certain information regarding our propylene contracts with Dow, Total, INEOS, BASF and LyondellBasell (in millions of pounds):

Company			Connections					Term

Contracts:
	Dow		Direct	690		510		12/31/18
	Total		Direct	300		222		12/31/14
	INEOS		Shell	284		244		12/31/13
	BASF		Shell	60		48		12/31/13
	LyondellBasell		Direct	120		60		12/31/12

		Total		1,454		1,084
	% of our capacity			100	%	75	%

Through our integrated pipeline system, we are also able to access other consumers of propylene which we are able to supply on a spot basis with our excess production capacity. We are located in a propylene market area that is net short of propylene and connected to major propylene consumers with the necessary logistics (feed and offtake pipelines) already in place. We actively manage our contract and spot portfolio and have received a high degree of interest from other customers for both spot volumes, in the short term, and longer term contracts. Since we commenced operations in October 2010, less than 4% of our sales have been in the spot market.

As part of the PDH process, we produce commercial quantities of hydrogen. Hydrogen is primarily consumed in numerous refinery processes including fuel desulphurization. As a result, we have entered into a ten-year contract with Praxair for the sale of our hydrogen production. Praxair has committed to buying a minimum of 18.6 million standard cubic feet per day of hydrogen, measured quarterly, which it supplies to local refineries along the upper Texas Gulf Coast. Any volumes we do not sell will be consumed in our fuel system reducing our requirement to purchase natural gas.

An additional benefit of our hydrogen production is that it provides a natural hedge against rising fuel costs due to the strong and positive correlation between natural gas prices and hydrogen prices. While an increase in natural gas prices would increase our operating costs (since we consume natural gas as a fuel), such increase would be partially offset by the higher prices we would earn through our hydrogen sales.

We also produce commercial quantities of C4 mix/C5+ streams. We sell the C4 mix stream to specialty chemical consumers or refiners and these customers transport the purchased volumes from our facility by truck. The C5+ stream, which is heavy in aromatics, is transported by our pipeline to a Kinder Morgan terminal, and then sold to Texas Aromatics for use in the chemical or gasoline markets.

We believe we are well positioned to execute on our business strategies based upon the following strengths:

The following table shows the impact of a change in the propane-to-propylene spread on our Adjusted EBITDA based on the assumptions described herein relative to our forecasted pricing for the twelve months ending June 30, 2013.

(1): The price sensitivity analysis in this table is based on the assumptions described in our forecast of Adjusted EBITDA for the twelve months ending June 30, 2013. This includes 1.294 billion pounds of propylene sold and 378.1 million gallons of propane utilized. It also assumes $18.6 million of by-product sales, $37.9 million of fuel and utilities expense, $16.8 million of insurance and property taxes, $50.3 million of direct operating expense and other and $14.5 million of general and administrative expense. All other customer discounts and upcharge/delivery fees are per our June 30, 2013 forecast. There can be no assurance that we will achieve our Adjusted EBITDA forecast for the twelve months ending June 30, 2013 or any of the specified levels of Adjusted EBITDA indicated above, or that the various propane-to-propylene spreads will achieve any of the levels specified above. These figures do not include the impact of any commodity derivative contracts. Our current commodity derivative contracts apply to the 2012 and 2013 calendar years, and are calculated based on the price of propane as a fixed percentage of the price of Brent crude oil. Pursuant to the omnibus agreement that we will enter into contemporaneously with the closing of this offering, the PL Manufacturing Members, through our general partner, will be allocated all of our benefits and obligations under the propane swaps. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner—Omnibus Agreement."
(2): See "Our Cash Distribution Policy and Restrictions on Distributions—Forecasted Available Cash" for a reconciliation of our Adjusted EBITDA forecast to our net income forecast for the twelve months ending June 30, 2013 and a discussion of the assumptions underlying our forecast.
(3): Reflects financial results as if the plant had been fully operational during the period. Assumes realized market pricing levels during the twelve months ended December 31, 2011 for propylene, propane, hydrogen, and C4 mix/C5+ streams and natural gas and that all other expenses, production rates, performance ratios, customer discounts, upcharge/delivery fees and conversion factors are consistent with the forecast for the twelve months ending June 30, 2013. These figures do not include the impact of any commodity derivative contracts. Our current commodity derivative contracts apply to the 2012 and 2013 calendar years, and are calculated based on the price of propane as a fixed percentage of the price of Brent crude oil. Pursuant to the omnibus agreement that we will enter into contemporaneously with the closing of this offering, the PL Manufacturing Members, through our general partner, will be allocated all of our benefits and obligations under the propane swaps. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner—Omnibus Agreement."

Our objective is to maximize our quarterly cash distributions to our unitholders by executing the following strategies:

Our management team initially conceived of the idea for the PDH project in 2003. The ExxonMobil Houston ethylene cracker was identified as the best location and platform for the project in 2005. An agreement to acquire the ethylene cracker from ExxonMobil was signed in December 2006 at which time we commenced front end engineering design work for the project. Our predecessor closed on the purchase of the ExxonMobil ethylene cracker in March 2008 and commenced demolition of certain facilities and construction of the new facility shortly thereafter. Mechanical completion of the construction phase of the project was completed in July 2010 at which time facility commissioning commenced. Initial production commenced in October 2010, and after an approximately year-long start-up and plant optimization phase, we achieved production rates at or near current capacity beginning in December 2011.

We are a Delaware limited partnership formed in June 2011. On March 30, 2012, in contemplation of this offering, Propylene Holdings contributed our predecessor to us. See "The Transactions and Our Structure and Organization" for more information.

Lindsay Goldberg is a private equity investment firm with approximately $9 billion of capital under management that focuses on partnering with entrepreneurial management teams and closely held and family-owned businesses. The firm typically invests in companies in North America and Western Europe in the manufacturing, energy, financial and business services industries. Lindsay Goldberg has an investment structure that permits ownership for up to 20 years, and has had a close relationship with our management since 2000.

York Capital is an event-driven global investment firm with approximately $17 billion of capital under management. The firm focuses on a variety of strategies, including private equity investing. Established in 1991, York Capital has offices in New York, Washington DC, London and Hong Kong.

Lindsay Goldberg and York Capital have been instrumental in our management team's effort to implement the optimal operating and financial platform for the project. Collectively, they will continue to own a majority of our common units upon completion of this offering and therefore will have a continuing incentive to support and promote the successful implementation of our business plan. Following the closing of this offering, Lindsay Goldberg and York Capital will indirectly own 67% and 17% interests in our general partner and 69,534,766 and 17,383,691 common units, respectively.

Our state-of-art PDH facility is a world-scale facility that is currently the largest of its kind in the world, based on production capacity. It is located on our 67-acre site in the vicinity of the Houston Ship Channel that was formerly the site of an ExxonMobil ethylene cracker. Our facility commenced operations in October 2010 and, after an approximately year-long start-up and plant optimization phase, achieved production rates at or near current capacity beginning in December 2011. Our newly-constructed facility has an annual production capacity of approximately 1.45 billion pounds of propylene. We believe the former ExxonMobil site was ideally suited for the development of our project based on its location, infrastructure, utilities, permits, logistics, and certain operating units we were able to utilize in the new process. As part of our purchase of the site, we acquired all major environmental and regulatory permits, and we were able to take advantage of these permits through amendments to reflect the specifications of the PDH process. Management estimates that utilization of the ExxonMobil site cost significantly less time and money than would have been required for the development of a green-field PDH facility.

We believe our location in the vicinity of the Houston Ship Channel provides unparalleled access and connectivity to both our existing and prospective customers and our feedstock suppliers. We are located within 50 miles of approximately one-half of all U.S. propylene consumption. We also have access through third parties to the leading global fractionation and storage hub for propane, our feedstock, located at Mt. Belvieu, Texas, approximately 30 miles from our facility.

The following is an illustration of the extensive pipeline system connected to our facility which makes our location uniquely suited to the business of propylene production, followed by a table indicating pipeline system ownership:

Propane dehydrogenation is a straightforward chemical process that involves refining propane by removing two atoms of hydrogen (H₂) from one molecule of propane (C₃H₈) to produce one molecule of propylene (C₃H₆). The technology that is used to remove hydrogen from the propane feedstock in order to produce propylene is the CATOFIN process, licensed by CB&I Lummus to us on a non-exclusive and perpetual basis. Our current license requires no further payment to CB&I Lummus until such time as our annual production levels exceed the amount set forth in our current license. To the extent we increase our operational capacity, we are responsible for additional one-time payments to CB&I Lummus for each metric ton of additional capacity above the original design basis. We selected this technology because of its straightforward design, its record of high reliability and expected low operating costs. Further, our team developed and implemented a variety of energy cost-saving processes which improved upon the typical CATOFIN design.

The CATOFIN process uses fixed-bed reactors to convert propane to propylene, recycling unconverted propane back to the reactors in order to optimize conversion, selectivity and energy consumption. During the dehydrogenation process, propane feed and propane recycle are vaporized, heated and dehydrogenated across the catalyst under a vacuum. After the dehydrogenation cycle, the catalyst is then regenerated with hot air. The hot air is then evacuated and the dehydrogenation sequence begins again. The reactor effluent is sent to the purification section where, using compression, refrigeration and distillation steps, the various hydrocarbons are separated into fuel gas and our products: propylene, C4 mix/C5+ streams and hydrogen.

Thirty-one CATOFIN (or CATADIENE as the process is known when producing butadiene) facilities have been licensed and built since 1944 to produce iso-butylene, butadiene, or propylene. Our facility is the fourth CATOFIN unit to produce propylene. The first propylene unit came on-line almost 20 years ago in Belgium.

Although our facility relies on the typical CATOFIN process design, we also implemented a number of energy cost savings process innovations. For example, the facility produces regeneration air using gas turbines instead of the typical compressor/heater configuration. Also, the hydrogen by-product is captured and purified by a pressure swing absorption unit then sold and consumed in neighboring refineries.

We have also designed and constructed the facility with the features necessary for high reliability. These include a state-of-the-art Honeywell Experian distributive control system, redundant/independent electrical power supplies, auxiliary steam production, redundant pumps for critical operations, redundant

compressors where practical, redundant dryers, and even redundant fractionation towers for some operations.

Under the CATOFIN license agreement, we have a general duty to preserve the confidentiality of technical information relating to the CATOFIN process and to notify CB&I Lummus of any unauthorized use or disclosure of such information.

Propane is our sole feedstock. Propane is produced by extraction and separation from natural gas production streams via gas processing facilities and fractionation. It is also produced as a by-product of refineries. Our propane is provided to us by Enterprise under a multi-year contract with market-based pricing consistent with industry standards. Under the propane supply contract, we pay a market price based on the published high-low monthly average price for propane. The initial term of the propane supply contract is for a period of five years (expiring in 2015). Thereafter, the contract is automatically renewed for successive three year terms unless cancelled by either party giving one year prior written notice of cancellation. Enterprise delivers the propane we purchase to our facility through a connection to Enterprise's propane pipeline system. The Enterprise propane pipeline system gathers propane from various natural gas processing and fractionation facilities and refineries located in the region and is connected to the leading global fractionation and storage hub for propane at Mt. Belvieu, Texas, where additional suppliers store and transport propane as well.

We believe that our supply strategy meets our expected feedstock requirements for the foreseeable future. However, if we choose not to or are unable to renew our Enterprise contract, we believe that, given our location, alternative propane supplies will be readily available from other suppliers in order to meet our production requirements.

See "Risk Factors—Risks Related to our Business—Our results of operations, financial condition and ability to make cash distributions may be adversely affected by the supply and price levels of propane."

Management estimates over 30 different companies produce propylene in North America. We consider companies with net long positions in PGP and CGP to be our direct competitors, including Enterprise, Chevron Phillips, ExxonMobil Chemical, Shell Chemical, Flint Hills and the Williams Companies. Most of our competitors have significantly greater financial and other resources than us and are engaged on a national or international basis in many segments of the petroleum products business including refining, transportation and marketing, on a scale substantially larger than ours. In addition, we may face competition from captive propylene production facilities operated by consumers of propylene. For example, Dow Chemical recently announced its plan to build its own on-purpose propane dehydrogenation propylene facility for start-up in 2015. Dow also announced that it is considering building a second propylene facility with a possible start-up date in 2018. We do not expect the completion of these plants to affect the amount of propylene that we sell as a result of the tight supply market that currently exists.

Competition in our industry is determined by price considerations, logistics and, to some extent, stability of supply. Our ability to compete effectively depends on our responsiveness to customer needs, our pipeline connectivity to customer facilities and our ability to provide reliable supply at competitive prices. We are the only independent dedicated on-purpose propylene production facility in North America. We believe this is a significant advantage because it enables us to provide customers a more consistent, predictable supply offering than conventional suppliers. However, it is possible that a competitor could construct an on-purpose propylene facility in future years and offer our customers similar capabilities.

See "Risk Factors—Risks Related to our Business—We face competition from other propylene producers."

The petrochemical business is subject to extensive and frequently changing federal, state and local laws and regulations relating to the protection of human health, workplace safety and the environment. These laws, their underlying regulatory requirements and their enforcement impact our business in a number of respects by imposing:

Environmental laws and regulations change regularly and any changes that result in more stringent requirements could affect our operations and financial position adversely. While we believe that we are in substantial compliance with currently applicable environmental laws and regulations and that continued compliance with existing requirements would not have a material adverse impact on us or our business, there is no assurance that this trend will continue in the future. Failure to comply with environmental laws and regulations may result in the assessment of administrative, civil and criminal fines and penalties and the imposition of injunctive relief.

Our operations are subject to the requirements of the OSHA and comparable state statutes that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that we maintain information about hazardous materials used or produced in our operations and that we provide this information to employees, state and local government authorities and local residents. Failure to comply with OSHA requirements, including general industry standards, record keeping requirements and monitoring of occupational exposure to regulated substances could reduce our ability to make distributions to our unitholders if we are subjected to fines or significant compliance costs.

The federal Clean Air Act and its implementing regulations as well as the corresponding state laws and regulations that regulate emissions of pollutants into the air affect our operations both directly and indirectly. We are required to comply with federal and state air permitting regulations or emissions control requirements relating to specific air pollutants. Some or all of the standards promulgated pursuant to the federal Clean Air Act, or any future standards which may be promulgated, may require the installation of controls or changes to our operations. If new controls or changes to operations are needed, then the costs could be material.

The federal Clean Air Act requires us, in certain situations, to obtain various construction and operating permits and to incur capital expenditures to install certain air pollution control devices at our PDH facility. Some of the applicable programs are the various general and specific source standards under the National Emission Standard for Hazardous Air Pollutants, New Source Performance Standards, and New Source Review. We may incur substantial capital expenditures to maintain compliance with these and other air emission regulations.

In addition, the EPA adopted rules to require the development of a Risk Management Plan to prevent the accidental release of hazardous substances that could harm public health or the environment.

Some facilities in Texas have obtained permits from the Texas Commission on Environmental Quality ("TCEQ") that are at risk from overfilling by the EPA. Specifically, on July 15, 2010, the EPA formally disapproved the flexible permits program submitted by the TCEQ in 1994 for inclusion in its Clean Air Act implementation plan. The EPA determined that Texas' flexible permit program did not meet several

requirements under the federal Clean Air Act. Because we did not use flexible permits, our facility's operations were not affected by EPA's actions. However, the EPA has also formally disapproved the TCEQ pollution control standard permit. This action could require companies to undergo conventional permitting for pollution control equipment. Industry groups and others have brought suit against the EPA for these actions. The EPA has also objected to several Title V permits in Texas and other states. Environmental groups have filed a notice of intent to sue the EPA, seeking to require the EPA to assume control of all pollution control permits from TCEQ. All of these developments have created substantial uncertainty regarding existing and future permitting in Texas. The EPA's challenges to the Texas permitting system created uncertainties about the authority of TCEQ to issue permits for air emissions which could have a material adverse effect on our operations.

Currently, legislative and regulatory measures to address greenhouse gas emissions (including CO₂, methane and nitrous oxides) are in various phases of discussion or implementation. At the federal legislative level, Congress could adopt some form of federal mandatory greenhouse gas emission reduction laws, although the specific requirements and timing of any such laws are uncertain at this time. In June 2009, the U.S. House of Representatives passed a bill that would create a nationwide cap-and-trade program designed to regulate emissions of CO₂, methane and other greenhouse gases. A similar bill was introduced in the U.S. Senate, but was not voted upon. Congressional passage of such legislation does not appear likely at this time, though it could be adopted at a future date. It is also possible that Congress may pass alternative climate change bills that do not mandate a nationwide cap-and-trade program and instead focus on promoting renewable energy and energy efficiency.

In the absence of congressional legislation curbing greenhouse gas emissions, the EPA has begun to regulate GHG emissions pursuant to the CAA based on the April 2007 United States Supreme Court ruling in Massachusetts, et al. v. EPA that the EPA has authority to regulate carbon dioxide emissions. The GHG regulations that EPA has issued following exercising the authority affirmed by Massachusetts v. EPA include: (1) the December 2009 "endangerment finding" determining that air pollution from six GHGs endangers public health and welfare, and that mobile sources cause or contribute to that air pollution; (2) the May 2010 "Tailpipe Rule," issued jointly with the National Highway Traffic Safety Administration setting GHG emission and fuel economy standards for new light-duty vehicles; (3) the April 2010 "Timing Rule," concluding that stationary source regulation under Titles I and V of the CAA (involving Prevention of Significant Deterioration regulations and operating permits, respectively) must regulate GHG emissions beginning when such emissions are subject to controls under the mobile source provisions of the Act; (4) the June 2010 "Tailoring Rule," temporarily exempting small stationary sources from PSD and Title V requirements through regulations modifying the Act's emissions thresholds; and (5) the December 2010 "SIP Call" rule, finding 13 State Implementation Plans ("SIPs") inadequate because they did not regulate GHGs from stationary sources, and directing those States to correct the inadequacies or face federalization of their permitting programs. The first four rules have been challenged in consolidated litigation in the D.C. Circuit. However, the Court refused to stay the rules while the challenge is pending.

In addition to the above rules, on March 27, 2012, the EPA proposed New Source Performance Standards (NSPS) for carbon dioxide emissions from new and modified electricity generation units ("EUGs"). The proposed NSPS set the first numerical limits for carbon dioxide emissions for an entire source category. The proposed rule does not purport to directly regulate existing EGUs or new EGUs that already have been permitted, but the EPA is obligated to establish emission guidelines for existing EGUs at some point in the future. We expect any final rule that may be promulgated as a result of this proposed rule to be appealed and otherwise subjected to various judicial challenges, the outcome of which cannot be predicted.

The EPA's endangerment finding, the Greenhouse Gas Tailoring Rule and certain other greenhouse gas emission rules have been challenged and will likely be subject to extensive litigation. In addition, a

number of Congressional bills to overturn the endangerment finding and bar the EPA from regulating greenhouse gas emissions, or at least to defer such action by the EPA under the federal Clean Air Act, have been proposed in the past, although President Obama has announced his intention to veto any such bills if passed.

In 2007, the U.S. Supreme Court decided that carbon dioxide is an air pollutant which is subject to regulation under the federal Clean Air Act for the purposes of vehicle emissions. Similar lawsuits have been filed seeking to require the EPA to regulate carbon dioxide emissions from stationary sources, such as petrochemical plants like our PDH facility. The implementation of EPA regulations and/or the passage of federal or state climate change legislation will likely result in increased costs to (1) operate and maintain our facilities, (2) install new emission controls on our facilities and (3) administer and manage any greenhouse gas emissions program. Increased costs associated with compliance with any future legislation or regulation of greenhouse gas emissions, if it occurs, may have a material adverse effect on our results of operations, financial condition and ability to make cash distributions to our unitholders.

The federal Clean Water Act, or CWA, affects our operations by prohibiting discharges of pollutants into, or impacting, navigable waters except in compliance with permits issued by federal and state governmental agencies. Regular monitoring, reporting requirements and performance standards are preconditions for the issuance and renewal of permits. The federal government has delegated authority to Texas to manage the CWA permit and enforcement process. The CWA and comparable state statutes provide for civil, criminal, and administrative penalties for the unauthorized discharge of pollutants into wetlands or other waters and impose liability on parties responsible for those discharges for the cost of cleaning up any environmental damage or natural resource damages resulting from the release. Our business maintains waste water and storm water discharge permits as required under the National Pollutant Discharge Elimination System program and the Texas Pollutant Discharge Elimination System program. Under the CWA, onshore facilities that could reasonably be expected to cause substantial harm to the environment by discharging pollutants to navigable waters are required to maintain plans for spill prevention, preparedness and response. We have implemented internal programs to oversee our compliance efforts and we believe that we are in substantial compliance with the CWA. In the future, changes to the CWA, state law, or state and federal regulations could require us to make additional capital expenditures or incur additional costs in order to comply with new rules and could have a significant effect on our profitability.

The Emergency Planning and Community Right-to-Know Act, or EPCRA, requires facilities to report certain chemical inventories to local emergency planning committees and response departments. We believe that we are in substantial compliance with our EPCRA reporting requirements.

Our operations are subject to the RCRA requirements for the generation, management, and disposal of hazardous wastes. These requirements entail certain costs. When feasible, materials that would be subject to RCRA are recycled instead of being disposed of. Though we believe that we are in substantial compliance with the existing requirements of RCRA, we cannot assure you that compliance with existing and future RCRA requirements will not entail costs that are significant.

CERCLA and comparable state laws impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons who are considered to be responsible for the release of a hazardous substance into the environment. These persons include the owner or operator of the site where

the release occurred and companies that disposed or arranged for the disposal of the hazardous substances. Under CERCLA, these persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA also authorizes the EPA, and in some instances third parties, to act in response to threats to the public health or the environment and to seek to recover from the responsible persons the costs they incur. It is possible for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. In the course of our ordinary operations, we may generate substances that fall within CERCLA's definition of a hazardous substance, and as a result, we may be jointly and severally liable under CERCLA for all or part of the costs required to clean up sites at which those hazardous substances have been released into the environment.

Under CERCLA, we could be required to remove or remediate previously disposed wastes, including wastes disposed of or released by prior owners or operators, to clean up contaminated property, including groundwater contaminated by prior owners or operators.

Our extensive safety program includes, among other things, (1) employing two full-time safety professionals, (2) implementing policies and procedures to protect employees and visitors at our facility (3) conducting routine safety tests on our facilities and (4) ensuring that each employee undergoes the required safety, hazard and task training.

To carry out our operations, our general partner will employ approximately 100 employees. Our employees and management were formerly employed by PL Propylene and its affiliates. As of January 1, 2012, these employees and management became employed by our general partner. Our employees are not represented by a labor union and are not covered by a collective bargaining agreement. We believe that we have good relations with our general partner's employees.

In addition to performing services for us, certain of our employees and executive officers perform management and administrative services for PL Midstream, an entity that is beneficially owned by Lindsay Goldberg, pursuant to a shared services agreement. PL Midstream will reimburse our general partner for its reasonable direct and indirect costs and expenses incurred in connection with the provision of management and administrative services to it. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of Our General Partner—Services Agreement with PL Midstream."

We own one facility, our PDH facility, which is located in Houston, Texas. Our executive offices are located in Houston, Texas, where a number of our senior executives work. We believe that our owned PDH facility, together with our leased executive office, are sufficient for our needs.

We are, and will continue to be, subject to litigation from time to time in the ordinary course of our business. We are not party to any pending legal proceedings that we believe will have a material adverse effect on our business, and there are no existing legal proceedings where we believe that the reasonably possible loss or range of loss is material.

Our general partner manages our operations and activities subject to the terms and conditions specified in our partnership agreement. Our general partner will be indirectly owned by our sponsors, certain of our executive officers and certain of its employees. The operations of our general partner in its capacity as general partner are managed by its board of directors. Actions by our general partner that are made in its individual capacity will be made by our sponsors, as indirect owners of a controlling interest in our general partner, and not by the board of directors of our general partner. Our general partner is not elected by our unitholders and will not be subject to re-election on a regular basis in the future. The executive officers of our general partner will manage our day-to-day activities consistent with the policies and procedures adopted by the board of directors of our general partner.

Limited partners will not be entitled to elect the directors of our general partner or directly or indirectly participate in our management or operation. Our partnership agreement contains various provisions which replace default fiduciary duties under applicable law with contractual corporate governance standards. See "The Partnership Agreement." Our general partner will be liable, as a general partner, for all of our debts (to the extent not paid from our assets), except for indebtedness or other obligations that are made expressly non-recourse to it. Our general partner therefore may cause us to incur indebtedness or other obligations that are non-recourse to it. Our new credit facilities are non-recourse to our general partner.

Whenever our general partner makes a determination or takes or declines to take an action in its individual, rather than representative, capacity, it is entitled to make such determination or to take or decline to take such other action free of any fiduciary duty or obligation whatsoever to us, any limited partner or assignee, and it is not required to act in good faith or pursuant to any other standard imposed by our partnership agreement or under Delaware law or any other law. Examples include the exercise of its call right, its voting rights and its determination whether or not to consent to any merger or consolidation of the partnership. Actions by our general partner that are made in its individual capacity will be made by our sponsors, as indirect owners of a controlling interest in our general partner, and not by its board of directors.

As a publicly traded partnership, we qualify for, and intend to rely on, certain exemptions from the NYSE's corporate governance requirements, including the requirement that a majority of the board of directors of our general partner consist of independent directors and the requirement that the board of directors of our general partner have a nominating/corporate governance committee that is composed entirely of independent directors. While not required by NYSE rules, the board of directors of our general partner intends to have a compensation committee, however, our compensation committee may not be composed entirely of independent directors.

As required by our partnership agreement, the board of directors of our general partner will maintain a conflicts committee, comprised of independent directors that will determine if the resolution of a conflict of interest with our general partner or its affiliates is fair and reasonable to us. Any matters approved by the conflicts committee will be conclusively deemed to be in good faith to us, approved by all of our partners and not a breach by our general partner of any duties it may owe us or our unitholders. The

members of the conflicts committee may not be directors, officers or employees of our general partner or any person controlling our general partner, including Lindsay Goldberg and York Capital, and must meet the independence standards established by the NYSE and the Exchange Act to serve on an audit committee of a board of directors, along with other requirements in our partnership agreement. In addition, as required by the Exchange Act and the listing standards of the NYSE, the board of directors of our general partner will maintain an audit committee comprised of at least three independent directors. The audit committee may also serve as the conflicts committee. If the board of directors of our general partner does not seek approval from the conflicts committee, and the board of directors of our general partner approves the resolution or course of action taken with respect to the conflict of interest, then it will be presumed that, in making its decision, the board of directors of our general partner acted in good faith, and in any proceeding brought by or on behalf of us or any unitholder, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.

The board of directors of our general partner will have at least one independent director to serve on the audit committee prior to our units being listed for trading on the NYSE, at least one additional independent director to serve on the audit committee within 90 days after listing of our units on the NYSE and a third independent director to serve on the audit committee not later than one year following the listing of our units on the NYSE.

This committee will oversee, review, act on and report to our board of directors of our general partner on various auditing and accounting matters, including: the selection of our independent accountants, the scope of our audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices. In addition, the audit committee will oversee our compliance programs relating to the legal and regulatory requirements as they relate to financial reporting.

Upon completion of this offering, the compensation committee will operate pursuant to a written charter. This committee will establish salaries, incentives and other forms of compensation for officers and certain other employees of our general partner.

We are managed and operated by the board of directors and executive officers of our general partner. In this prospectus, we refer to the executive officers of our general partner as "our executive officers." Ms. Spurlin and Mr. Jeans will divide their working time between the management of PL Midstream and the management of us. In addition, under our partnership agreement, employees and executive officers of our general partner may, from time to time, provide management, advisory and administrative services to its affiliates and other persons.

The following table sets forth the names, positions and ages of our executive officers and directors as of December 31, 2011:

Name		Position with Our General Partner

David Lumpkins	57	Executive Chairman and Director
Nathan Ticatch	46	President, Chief Executive Officer and Director
Sharon Spurlin	46	Senior Vice President and Chief Financial Officer
Hank Jeans	59	Senior Vice President—Commercial
John Parkinson	50	Vice President—Operations
Randy Miller	46	Vice President—Engineering
John B. Walker⁽¹⁾	66	Director
Alan E. Goldberg	57	Director
Lance L. Hirt	44	Director
Zalmie Jacobs	46	Director
Robert D. Lindsay	56	Director
Andrew S. Weinberg	37	Director

David Lumpkins, co-founder of our predecessor, is responsible for formulating and executing our business strategy as well as providing general executive oversight of our managerial and commercial activities. Mr. Lumpkins has had a key role since the initial conception in the development and execution of the plan to develop the PDH facility now owned and operated by the Partnership. Mr. Lumpkins has been affiliated with Lindsay Goldberg since 2000, during which time he has worked on a number of investment opportunities in the petrochemical and energy mid-stream industries including Lindsay Goldberg's investment in PL Midstream which he helped initiate and served as Chairman. Prior to his affiliation with Lindsay Goldberg, Mr. Lumpkins worked in the investment banking industry for 17 years principally for Morgan Stanley and Credit Suisse. In 1995, Mr. Lumpkins opened Morgan Stanley's Houston office and served as head of the firm's southwest region. He is a graduate of the University of Texas where he also received his MBA. Mr. Lumpkins' extensive experience in the petrochemical, energy midsteam and finance industries adds significant value to the board of directors of our general partner.

Nathan Ticatch, co-founder of our predecessor, is responsible for formulating and executing our business strategy and for managing the operations and commercial activities of the Partnership. Mr. Ticatch is the originator of the PDH project idea and has had a key role in the development and execution of the plan to develop the PDH facility now owned and operated by the Partnership. Mr. Ticatch has been affiliated with Lindsay Goldberg since 2000, during which time he has worked on a number of investment opportunities in the petrochemical and energy mid-stream industries including Lindsay Goldberg's investment in PL Midstream which he helped initiate and most recently served as Vice-Chairman. Prior to his affiliation with Lindsay Goldberg, Mr. Ticatch worked in the petrochemical and logistics industry for GATX Terminals and ICI Americas. He is a graduate of Virginia Polytechnic Institute and State University with an engineering degree and received an MBA from the College of William and Mary. Mr. Ticatch's record of innovation in the petrochemical and logistics industries provides the critical capabilities that the board of directors of our general partner needs to manage our business.

Sharon Spurlin has served as Senior Vice President and Chief Financial Officer of our predecessor since 2009. Ms. Spurlin also serves in that capacity for PL Midstream, another investment of Lindsay Goldberg related to the energy and petrochemical logistics sector. Ms. Spurlin is responsible for overseeing our accounting and financial reporting functions, business banking relations, treasury, procurement and information systems. From September 2002 to June 2009, Ms. Spurlin served as the Assistant Treasurer for Plains All American Pipeline, L.P., where she also started up their Internal Audit group. Prior to joining

Plains All American Pipeline, L.P., Ms. Spurlin held the roles of Controller and Director of Financial Analysis for American Ref-Fuel Company and was an audit manager for a public accounting firm. Sharon earned a BBA in Accounting from Texas A&M University at Kingsville and is a Certified Public Accountant in the state of Texas.

Hank Jeans has served as the Senior Vice President—Commercial for our predecessor since inception. He has also served in that capacity for PL Midstream, another investment of Lindsay Goldberg related to the energy and petrochemical logistics sector. Mr. Jeans is responsible for managing our business development and commercial activities. Prior to his affiliation with Lindsay Goldberg, Mr. Jeans worked in the crude oil, natural gas liquids and petrochemical industry for 30 years, most recently at Williams Olefins (from 1999 to 2004), where he was Director of NGL Feedstocks and Olefins. His responsibilities in that capacity included the acquisition of feedstocks and the marketing of ethylene, propylene and other co-products. Prior to his employment with Williams Olefins, Mr. Jeans spent 16 years with Union Texas Petroleum Corporation where he held various management positions. Mr. Jeans received a BS in Marketing from Louisiana State University and completed the Executive MBA Program at Rice University's Jesse H. Jones School of Management.

John Parkinson has served as the Vice President—Operations of our predecessor since 2010. In 2008 and 2009 Mr. Parkinson served as Operations Manager. Mr. Parkinson is the PDH facility site manager and is responsible for managing all the operations of our PDH facility. Mr. Parkinson has worked in the petrochemical industry for over 26 years holding various business and operating positions of increasing responsibility. Prior to joining our predecessor in June 2008, Mr. Parkinson worked for 12 years for Lyondell Chemical Company, where he held various roles in the business and manufacturing groups with the most recent assignments as the specialty polymers business manager and plant manager at the Clinton, Iowa facility. Prior to Lyondell, Mr. Parkinson worked for Chevron Chemical Company for eight and a half years and Allied Signal for four years in various manufacturing roles. Mr. Parkinson received his chemical engineering degree from North Carolina State University in 1984.

Randy Miller has served as the Vice President—Engineering of our predecessor since 2007. Mr. Miller has been instrumental in the design and development of the PDH facility since the commencement of the front end engineering design work in 2007. Mr. Miller has worked in the petrochemical industry for over 20 years. Prior to joining our predecessor, he served as a Senior Process Consultant at Barnes and Click Inc. from 1999 to 2006 where his last assignment was to advise us with respect to the development of the PDH project concept. Prior to Barnes and Click he worked for Westlake Chemical Company from 1995 to 1999 and for Dow Chemical from 1988 to 1995. He received a BS in Chemical Engineering from Texas A&M University and a MBA from University of Houston at Clear Lake, and is a Registered Engineer in the State of Texas.

John B. Walker is the President and CEO of EnerVest, Ltd., and Executive Chairman of EV Energy Partners, L.P., a master limited partnership. EnerVest is a private equity investment firm focused on the oil and gas industry. EnerVest entities have acquired more than $6 billion in oil and gas properties and currently operate approximately 20,000 wells in twelve states. In his early career on Wall Street, Mr. Walker was selected by Institutional Investor as an "All American" energy analyst for six years in a row. He holds a BBA (with honors) from Texas Tech University and a MBA (with distinction) from New York University. Mr. Walker served the Independent Petroleum Association of America (IPAA) as Chairman from 2003-2005. He is a member of the National Petroleum Council and All-American Wildcatters. He serves or has served on the boards of the Houston Producers' Forum, Foundation for Energy Education, Petroleum Club of Houston, and the Texas Independent Producers and Royalty Owners Association. He is also a member of the Board of Regents of the Texas Tech University System. Mr. Walker was selected to serve on the board of directors of our general partner because of his extensive experience in the energy industry as well as his leadership role in a master limited partnership.

Alan E. Goldberg was appointed as a director of our general partner in June 2011. Mr. Goldberg became a director of our predecessor in 2007. Mr. Goldberg co-founded Lindsay Goldberg in 2001 and

currently serves as a Co-Managing Partner. Mr. Goldberg holds a J.D. from Yeshiva University, an M.B.A. from the New York University Graduate School of Business, and a B.A. in philosophy and economics from New York University. Mr. Goldberg is a director of FAPS Holdings, Inc., Maine Beverage Company, LLC, PL Logistics LLC, Continental Energy Systems LLC, Intermex Holdings, Inc., The Brock Group, Inc., Brightstar Corp., Rosetta LLC, RECON Holdings III Inc., Ambulatory Services of America, Inc., Crane & Co., Inc., Scandza AS, PSC, LLC, Panadero Aggregates Holdings, LLC, Aviv REIT, Inc. and Pacific Architects and Engineers Incorporated. He also serves as a Trustee of Yeshiva University. Mr. Goldberg served as a director of EnergySolutions, Inc. from 2005 until 2008. Mr. Goldberg was selected to serve on the board of directors of our general partner due to his significant investment experience and business judgment.

Lance L. Hirt was appointed as a director of our general partner in June 2011. Mr. Hirt became a director of our predecessor in 2007. Mr. Hirt is a partner at Lindsay Goldberg, which he joined in 2003. Mr. Hirt received his M.B.A. and J.D. from Harvard University and graduated from Yeshiva College with a B.A. in economics. He currently serves as a director of PL Logistics LLC, The Brock Group, Inc., Brightstar Corp., RECON Holdings III Inc., Scandza AS, PSC, LLC, TryggPharma Holding AS and Panadero Aggregates Holdings, LLC. He also serves as a Trustee of Yeshiva University in New York City. Mr. Hirt served as a director of EnergySolutions, Inc. from 2005 until 2009. Mr. Hirt was selected to serve on the board of directors of our general partner due to his expertise in business strategy and mergers and acquisitions.

Zalmie Jacobs was appointed as a director of our general partner in June 2011. Mr. Jacobs became a director of our predecessor in 2008. Mr. Jacobs joined York Capital in March 2008 and is Co-Head of Private Equity at York Capital and a partner of the firm. Prior to joining York Capital, for eleven years Mr. Jacobs co-led an investment group at Leucadia National Corporation. Previously, Mr. Jacobs worked as a Vice President at The Carlyle Group. Prior to that, he was a corporate attorney at Davis, Polk & Wardwell. Mr. Jacobs received a B.A. from Columbia College and a J.D. from Harvard Law School. Mr. Jacobs' knowledge of our business and extensive investment experience make him a valuable addition to the board of directors of our general partner.

Robert D. Lindsay was appointed as a director of our general partner in June 2011. Mr. Lindsay became a director of our predecessor in 2007. Mr. Lindsay co-founded Lindsay Goldberg in 2001 and currently serves as a Co-Managing Partner. Mr. Lindsay holds an M.B.A. from Stanford University and a B.A. in English and American literature and language from Harvard College. He is President and Chief Executive Officer of Bessemer Securities LLC as well as a director of The Bessemer Group, Incorporated and its subsidiary banks, including Bessemer Trust Company, N.A. Mr. Lindsay serves as a director of Pike Electric Corporation, FAPS Holdings, Inc., Maine Beverage Company, LLC, PL Logistics LLC, Continental Energy Systems LLC, Intermex Holdings, Inc., The Brock Group, Inc., Brightstar Corp., Bell Nursery Holdings, LLC, Rosetta LLC, Ambulatory Services of America, Inc., Crane & Co., Inc., Scandza AS, PSC, LLC, Panadero Aggregates Holdings, LLC, Aviv REIT, Inc. and Pacific Architects and Engineers Incorporated. He also serves as a Trustee of the Cold Spring Harbor Biological Laboratory and St. Paul's School in Concord, New Hampshire. Mr. Lindsay served as a director of EnergySolutions, Inc. from 2005 until 2008. Mr. Lindsay was selected to serve on the board of directors of our general partner due to his significant investment experience and business judgment.

Andrew S. Weinberg was appointed as a director of our general partner in June 2011. Mr. Weinberg became a director of our predecessor in 2007. Mr. Weinberg is a partner at Lindsay Goldberg, which he joined in 2003. Mr. Weinberg holds an M.B.A. from Stanford University, and an A.B. in Economics and History from Dartmouth College. He currently serves as a Director of PL Logistics LLC, The Brock Group, Inc., Brightstar Corp., RECON Holdings III Inc., Scandza AS, PSC, LLC, and TryggPharma Holding AS. Mr. Weinberg served as a director of EnergySolutions, Inc. from 2005 until 2009. Mr. Weinberg was selected to serve on the board of directors of our general partner due to his strategic and merger and acquisition expertise.

The directors of our general partner hold office until the earlier of their death, resignation or removal.

Our general partner has the sole responsibility for conducting our business and for managing our operations and its board of directors and officers make decisions on our behalf. In connection with the completion of this offering, the board of directors of our general partner will form a compensation committee that will determine the future compensation of the directors and officers of our general partner, including the named executive officers.

Historically, the board of managers of PL Manufacturing, the indirect owner of our predecessor, made all decisions regarding the compensation of our executive officers. Prior to the completion of this offering, certain of our executive officers, including Messrs. Lumpkins, Ticatch, and Jeans and Ms. Spurlin, have performed services for both PL Propylene and PL Midstream, an entity controlled by Lindsey Goldberg, and the aggregate compensation paid to those executive officers has been in recognition of services provided to both entities. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner" for a discussion of the arrangements between our predecessor and its affiliated entities with respect to the shared services performed by our executive officers and the allocation of costs associated with such arrangements. The narratives and tables provided below describe the aggregate compensation received by the named executive officers. Going forward, certain executive officers, including Ms. Spurlin and Mr. Jeans, will continue to perform services both for us and for PL Midstream. See "Certain Relationships and Related Party Transactions—Agreements with Affiliates of our General Partner" for information regarding the shared services arrangements following the completion of this offering.

In addition to discussing the aggregate compensation paid to the executive officers, this compensation discussion and analysis, or CD&A, provides information about the compensation objectives and policies for these individuals and is intended to place in perspective the information contained in the executive compensation tables that follow this discussion. This CD&A provides a general description of the compensation program and specific information about its various components.

Throughout this discussion, the following individuals are referred to as the "named executive officers" and are included in the Summary Compensation Table:

The historical compensation discussion that follows reflects the total compensation the named executive officers received for services provided, and the philosophy and policies that drove the compensation decisions for these named executive officers, as implemented by the board of managers of PL Manufacturing. Current and forward-looking statements refer to the compensation philosophy, policy and practices of our general partner and the procedures our general partner either has adopted or intends to adopt, though these practices are largely a continuation of the compensation practices historically employed. Unless otherwise noted, within the remainder of this CD&A, references to "we" and "our" refer to both the philosophy and policies historically implemented, as well as the philosophy and policies to be implemented by our general partner upon completion of this offering. The philosophy and policies may change in the future.

Our future success and the ability to create long-term value for our unitholders depends on our ability to attract, retain, and motivate the executives necessary to manage our business. We employ a compensation philosophy that emphasizes pay for performance. We believe that compensation should:

Although not formally adopted as objectives in 2011 and prior years, the preceding objectives are consistent with the compensation arrangements we have utilized historically. In the future, we also intend to ensure that a portion of the total compensation made available to the named executive officers is based on the total return received by our unitholders, thus assuring an alignment of interests between employees and our unitholders.

Historically, the board of managers of PL Manufacturing determined the overall compensation philosophy and set the final compensation of the named executive officers without the assistance of a compensation consultant. Following the formation of the compensation committee by the board of directors of our general partner, all compensation decisions for the named executive officers will be determined by the compensation committee.

The compensation committee will seek to provide a total compensation package designed to drive performance and reward contributions in support of our business strategies and to attract, motivate and retain high quality talent with the skills and competencies required by us. It is possible that the compensation committee will examine the compensation practices of our peer companies and may also review compensation data from our industry generally to the extent the competition for executive talent is broader than a group of selected peer companies. In addition, the compensation committee may review and, in certain cases, participate in, various relevant compensation surveys and consult with compensation consultants with respect to determining compensation for the named executive officers. We expect that our Executive Chairman, Mr. Lumpkins, and our President and Chief Executive Officer, Mr. Ticatch, will provide periodic recommendations to the compensation committee regarding the compensation of the other named executive officers. It is also possible that we may engage a compensation consultant prior to the completion of this offering to assist us in determining the compensation of our named executive officers that will become effective upon the closing of this offering.

The following discussion regarding the elements of compensation provided to the named executive officers reflects our historical philosophy concerning the division of the elements of senior management employees' compensation packages, which our general partner, at this time, continues to employ. For the fiscal year ended December 31, 2011, the principal elements of compensation for the named executive officers were the following:

The long-term equity-based incentive awards that have historically been granted have been in the form of profits interests awards. Historically, profits interests awards have comprised a significant portion of the potential compensation for the named executive officers and other employees in order to incentivize and motivate employees to grow unitholder value. Profits interests are not the same security as the common units being issued in this offering, and the number of profits interests awarded does not correlate to the common units that are being issued in this offering. In connection with this offering, certain employees of our general partner and an affiliated company will receive distributions with respect to their outstanding profits interests awards and those awards will then be cancelled in their entirety and will cease to be outstanding following the completion of this offering. The information provided with respect to these profits interests awards in the following narratives and tables is provided in order to comply with the disclosure rules of the Securities and Exchange Commission regarding our historical compensation; however, these profits interests awards will not comprise a portion of the compensation package for any of the employees of our general partner following the completion of this offering.

Base Salary. Base salary is the fixed annual compensation we pay to each named executive officer for performing specific job duties. It represents the minimum income a named executive officer may receive for a full year's performance.

Historically, the board of managers of PL Manufacturing has established the annual base salary rate for each of the named executive officers at a level necessary to retain the individual's services. While we believe it is important to provide our named executive officers with an appropriate amount of fixed compensation each year, the base salaries of our named executive officers have been a small portion of their total compensation relative to the potential value that our named executive officers could realize with respect to the profits interests awards we granted in 2010 and prior years. The board of managers of PL Manufacturing reviews base salaries on an annual basis, in consultation with the Executive Chairman and the President and Chief Executive Officer, and may adjust base salaries upon consideration of any factors they deem relevant, including, but not limited to: (i) any increase or decrease in the executive's responsibilities, (ii) the executive's job performance, and (iii) the level of compensation paid to executives of other companies with which we compete for executive talent, as estimated based on publicly available information and the experience of the members of our board of managers of PL Manufacturing and our President and Chief Executive Officer.

For 2011, we adopted base salary increases for certain of our named executive officers. Specifically, for 2011, (a) Ms. Spurlin's base salary was increased from $250,000 to $260,000, (b) Mr. Jeans' base salary was increased from $225,000 to $240,000 and (c) Mr. Miller's base salary was increased from $230,000 to $250,000. Contemporaneous with the consummation of this offering, we may adopt base salary adjustments as deemed necessary in order for us to maintain a competitive compensation program following the effectiveness of this offering. In light of the elimination of our profits interests program in connection with the completion of this offering, going forward, we anticipate that base salary determinations made by the compensation committee of the board of directors of our general partner will be based on a broader group of factors than those we have historically considered, including the amounts considered necessary to attract and retain the highest quality executives, the responsibilities of the named executive officers, the officer's position and level of responsibility, and the base salary amounts paid to executive officers in similar positions with similar responsibility at other companies in our industry.

Discretionary Bonus Awards. Historically, annual bonuses have been discretionary. We review annual cash bonus awards for the named executive officers annually to determine award payments for the last completed fiscal year. We do not have a practice of establishing target bonuses for our named executive officers. When determining the appropriate bonus level each year we consider both company and individual performance; however, there are no pre-established formulas, metrics or goals against which we measure the company or individual performance factors. We believe that an annual bonus program based on performance motivates management to achieve key short-term corporate objectives and aligns executives' interests with our unitholders' interests.

The bonuses paid for 2011 were approved by the board of managers of PL Manufacturing following a year-end review of the individual performance of the executive officer in question and our overall performance. For 2011, the company performance component was primarily based on efforts expended by our named executive officers towards the successful start-up and operation of our PDH facility. While the board of managers of PL Manufacturing takes all relevant information into account, the material factors considered when evaluating each executive's individual performance for 2011 included: (i) their contribution to our overall success, (ii) any increase or decrease in the level of their responsibilities and duties, and (iii) the overall quality of their job performance during the year. The amount of each named executive officer's annual bonus for 2011 was determined in the full discretion of the board of managers of PL Manufacturing after taking all of the factors enumerated above into consideration and determining what amount seemed fair and reasonable under the facts and circumstances.

In the future, we expect that the compensation committee of our general partner's board of directors will continue to rely on discretionary annual bonus awards to the named executive officers. Our general partner intends to use discretionary bonus awards for achieving financial and operational goals and for achieving individual performance objectives.

Long-Term Equity-Based Incentive Awards. As discussed above, historically, the compensation structure has included long-term equity-based incentive awards in the form of profits interests that allowed key employees of affiliated companies to share in the distributions received by the unitholders of PL Manufacturing once a certain level of proceeds has been generated. As of January 1, 2012, certain key employees became employees of our general partner. Value with respect to these awards is only realized once certain investment return thresholds have been met. These profits interests awards have comprised a substantial portion of the potential compensation that our named executive officers and other employees of our general partner could realize in order to motivate such individuals to grow unitholder value. Award holders will receive distributions with respect to these profits interests awards in connection with the completion of this offering, and these awards will cease to exist following the completion of the offering.

Prior to 2010, (a) fully vested Class B profits interests were issued to Messrs. Lumpkins and Ticatch and (b) Class C profits interests were issued to Ms. Spurlin. In addition, in 2010, (i) Class C profits interests were issued to all members of the management team (other than Ms. Spurlin), and (ii) Class D profits interests were issued to Messrs. Lumpkins and Ticatch. The Class C and Class D profits interests are subject to a vesting schedule that requires continued service by the award recipient, and will vest in substantially equal annual installments over the four year period beginning on the later of March 11, 2009, or the recipient's commencement of employment. The profits interests will become fully vested upon the earlier to occur of (1) a sale or other disposition of our assets, with respect to any distribution of net proceeds received in connection with the sale, or (2) at the discretion of the board of managers of PL Manufacturing. If an award recipient's employment terminates for any reason, all unvested profits interests will be forfeited unless otherwise determined by the board of managers of PL Manufacturing. If an award recipient's employment is terminated involuntarily for cause, all vested profits interests will also be forfeited.

Holders of profits interests awards are entitled to receive distributions when and as determined by the board of managers of PL Manufacturing. The ultimate amount received by each holder will vary depending on the level of amounts distributed. We anticipate that the named executive officers will receive the following estimated amounts in respect of their Class B, Class C and Class D profits interests, as applicable, in connection with the completion of this offering: (a) Mr. Ticatch—$156,290,252, (b) Ms. Spurlin—$1,787,792, (c) Mr. Lumpkins—$191,021,419, (d) Mr. Jeans—$6,704,222 and (e) Mr. Miller—$8,938,962. These amounts will be paid to the named executive officers in a combination of cash and our common units. Following the consummation of this offering, the profits interests will be cancelled and will cease to be outstanding.

In order to incentivize management members following the completion of this offering to continue to grow our business, our general partner will adopt a long-term incentive plan for employees, consultants and directors of our general partner and its affiliates, who perform services for us. Each of the named executive officers is eligible to participate in this plan, which will become effective upon the consummation of this offering. The long-term incentive plan provides for the grant of unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights, substitute awards and other unit-based awards. These awards are intended to align the interests of key employees (including the named executive officers) with those of our unitholders and to give those employees the opportunity to share in our long-term performance. See "—Long Term Incentive Plan."

Employee Benefits. In addition to the elements of compensation previously discussed, the named executive of


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

Title of each class of securities to be registered	Proposed maximum aggregate offering price⁽¹⁾⁽²⁾	Amount of registration fee




Common units representing limited partner interests	$845,250,000	$97,766⁽³⁾

	Initial Public Offering Price	Underwriting Discounts and Commissions	Proceeds to PetroLogistics LP	Proceeds to Propylene Holdings LLC

Per Common Unit	$	$	$	$
Total	$	$	$	$


	Our Products and Customers	93
	Our Competitive Strengths	95
	Our Business Strategy	97
	Our History	98
	Our Sponsors	98
	Our Facility	99
	Our PDH Technology	100
	Feedstock Supply	101
	Competition	101
	Environmental Matters	102
	Safety, Health and Security Matters	105
	Employees	105
	Properties	105
	Legal Proceedings	105
MANAGEMENT		106
	Our Management	106
	Board Committees	106
	Executive Officers and Directors	107
	Compensation Discussion and Analysis	111
	Employment Agreements	115
	Severance and Change in Control Agreements	116
	Tax Considerations	116
	Executive Compensation	116
	Summary Compensation	116
	Director Compensation	118
	Compensation Practices as they Relate to Risk Management	119
	Long-Term Incentive Plan	119
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		123
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		125
	Distributions and Payments to Our General Partner and its Affiliates	125
	Agreements with Affiliates of Our General Partner	126
CONFLICTS OF INTEREST AND FIDUCIARY DUTIES		129
	Conflicts of Interest	129
	Fiduciary Duties	133
	Related Party Transactions	135
DESCRIPTION OF OUR COMMON UNITS		136
	Our Common Units	136
	Transfer Agent and Registrar	136
	Transfer of Common Units	136
	Listing	137
THE PARTNERSHIP AGREEMENT		138
	Organization and Duration	138
	Purpose	138
	Capital Contributions	138
	Voting Rights	138
	Applicable Law; Forum, Venue and Jurisdiction	140
	Limited Liability	140
	Issuance of Additional Partnership Interests	141


	Amendment of Our Partnership Agreement	142
	Merger, Sale or Other Disposition of Assets	144
	Termination and Dissolution	144
	Liquidation and Distribution of Proceeds	145
	Withdrawal or Removal of Our General Partner	145
	Transfer of General Partner Interest	146
	Transfer of Ownership Interests in Our General Partner	146
	Change of Management Provisions	147
	Call Right	147
	Non-Citizen Assignees; Redemption	147
	Meetings; Voting	148
	Status as Limited Partner or Assignee	148
	Indemnification	148
	Reimbursement of Expenses	149
	Books and Reports	149
	Right to Inspect Our Books and Records	150
COMMON UNITS ELIGIBLE FOR FUTURE SALE		151
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		152
	Taxation of the Partnership	152
	Tax Consequences of Unit Ownership	153
	Tax Treatment of Operations	159
	Disposition of Units	160
	Uniformity of Units	162
	Tax-Exempt Organizations and Other Investors	162
	Administrative Matters	163
	State, Local and Other Tax Considerations	165
INVESTMENT IN PETROLOGISTICS LP BY EMPLOYEE BENEFIT PLANS		166
UNDERWRITERS		167
	Pricing of the Offering	170
	European Economic Area	170
	United Kingdom	171
	Switzerland	171
	Hong Kong	171
	Singapore	171
	Japan	172
LEGAL MATTERS		173
EXPERTS		173
WHERE YOU CAN FIND MORE INFORMATION		173
INDEX TO FINANCIAL STATEMENTS		174
APPENDIX A FIRST AMENDED AND RESTATED PARTNERSHIP AGREEMENT		A-1
APPENDIX B GLOSSARY OF SELECTED TERMS		B-1


Delaware (State or other jurisdiction of incorporation or organization)		2890 (Primary Standard Industrial Classification Code Number)		45-2532754 (I.R.S. Employer Identification Number)


Copies to:
Mike Rosenwasser James J. Fox Vinson & Elkins L.L.P. 666 Fifth Avenue, 26th Floor New York, NY 10103 (212) 237-0000		G. Michael O'Leary Andrews Kurth LLP 600 Travis, Suite 4200 Houston, Texas 77002 (713) 220-4200


SOCIETE GENERALE		STIFEL NICOLAUS WEISEL		SUNTRUST ROBINSON HUMPHREY


PROSPECTUS SUMMARY		1
	Organizational Structure	8
	The Offering	11
	Summary Historical and Pro Forma Consolidated Financial Information	16
RISK FACTORS		19
	Risks Related to Our Business	19
	Risks Related to an Investment in Us	33
	Tax Risks	39
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		43
THE TRANSACTIONS AND OUR STRUCTURE AND ORGANIZATION		45
	The Transactions	45
	Management	46
	Conflicts of Interest and Fiduciary Duties	46
USE OF PROCEEDS		47
CAPITALIZATION		48
DILUTION		49
OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS		51
	General	51
	Forecasted Available Cash	53
	Assumptions and Considerations	56
HOW WE MAKE CASH DISTRIBUTIONS		60
	General	60
	Common Units Eligible for Distribution	60
	Method of Distributions	60
	General Partner Interest	60
	Adjustments to Capital Accounts upon Issuance of Additional Common Units	60
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION		61
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		64
	Overview	64
	Factors Affecting the Comparability of Future Results	64
	Factors Affecting Results	66
	How We Evaluate Our Performance	67
	Results of Operations	67
	Critical Accounting Policies	71
	Liquidity and Capital Resources	73
	Cash Flows	77
	Contractual Obligations	78
	Off-Balance Sheet Arrangements	78
	Quantitative and Qualitative Disclosures about Market Risk	78
INDUSTRY OVERVIEW		80
	Propylene Industry Overview	80
	Propane Market Overview	88
BUSINESS		93
	Our Business	93

	Illustrative Sensitivity to Propane-to-Propylene Spread⁽¹⁾⁽²⁾

	(dollars in millions unless otherwise indicated)
Propane-to-Propylene Spread (¢/lb)⁽⁵⁾		15.0		25.0	35.0	45.0	55.0	33.9	41.6
Adjusted EBITDA		24.8		154.2	283.6	413.0	542.4	255.6	369.9
Available Cash		(35.9	)	92.2	220.3	348.4	476.5	192.5	305.7

	Units Acquired					Total Consideration

	Number		Percent			Amount			Percent
Propylene Holdings and its affiliates		104,000,000		74.8	%		327,971,000	⁽¹⁾		33.4	%
New investors		35,000,000		25.2	%		653,100,000	⁽²⁾		66.6	%

Total		139,000,000		100.0	%		981,071,000			100.0	%

	Feedstock

	Ethane		Propane		Naphtha		Gas Oil
Product Yield:
Ethylene		0.78		0.42		0.37		0.23
Propylene		0.03		0.17		0.18		0.15
Other		0.19		0.41		0.45		0.62

Pipeline	Ownership	Pipeline	Ownership

Propane	Enterprise	Coker Gas (unutilized)	LyondellBasell
Propane (unutilized)	ETP—Regency Midstream	FCC Gas (unutilized)	Valero
PGP	PetroLogistics	Hydrogen Delivery	Praxair
CGP	PetroLogistics	Nitrogen Delivery	Praxair
C4 Mix Stream (inactive)	PetroLogistics	Natural Gas	Kinder Morgan
C5+ Stream	PetroLogistics


Morgan Stanley
	Citigroup
		UBS Investment Bank