UPDATE 2-TPC Group gets higher buyout offer from Innospec

* Potential offer at $44 to $46 per share in cash

* TPC says will consider the non-binding proposal

* Shares of TPC up 10.7 percent in premarket

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Oct 8 (Reuters) - Chemicals maker TPC Group Inc on Monday said it received a buyout proposal from Innospec Inc

worth as much as $721 million, topping an offer from two private equity firms made in August.

Private equity firms First Reserve Corp and SK Capital Partners in August had offered $627.2 million to acquire TPC.

The deals pit the private equity industry's desire to expand into a high-margin sector against a chemical industry veteran's attempt to expand.

TPC's main product is butadiene, used to make synthetic rubber for tires and other automotive products. But weak demand has pressured its business this year as prices for butadiene have fallen sharply, causing a trough in TPC's market.

Innospec, a specialty chemical maker, could offer $44 to $46 per share in cash, TPC said in a statement on Monday.

First Reserve and SK Capital offered $40 a share in late August.

Shares of TPC closed at $40.67 on the Nasdaq on Friday. The shares have consistently traded above the $40 price offered by the private equity firms, and at least two of TPC's top-10 shareholders have said they will vote against the deal.

In premarket Monday trading, shares of TPC jumped 10.7 percent to $45.01. Shares of Innospec were unchanged from their Friday close at $34.35.

TPC said it will consider the non-binding proposal from Innospec. It previously said a transaction with First Reserve and SK Capital Partners would be in the best interest of shareholders.

Perella Weinberg Partners LP is advising TPC. Blackstone is providing equity financing forInnospec.

(Reporting by Ernest Scheyder in New York and Krishna N. Das in Bangalore; Editing by Don Sebastian and Leslie Adler)