Dow's Oman JV set to be cancelled - Deutsche Bank

06 July 2007 14:24  [Source: ICIS news]

TORONTO (ICIS news)--Dow Chemical’s planned petrochemical joint venture in Oman will likely be cancelled due to high construction costs and insufficient natural gas supplies, Deutsche Bank said in a research note on Friday, citing press reports.

 

A spokesperson at Dow’s headquarters in Midland, Michigan, could not provide immediate comment on the project with the Sultanate of Oman and Oman Oil Company (OOC).

 

Concerns over construction costs and gas availability had already pushed back the project’s anticipated start-up date from 2008 to 2011, Deutsche said.

 

“The cancellation … confirms that the JV's value to Dow has deteriorated since the project was first announced in July 2004,” Deutsche said.

 

The cancellation was mildly positive for the industry, Deutsche said, adding it removed a world-scale ethylene project and thus helped to soften the impact of a trough in the cycle expected for 2009-2011.

By: Stefan Baumgarten
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