Dow mulls more on-purpose C3 to take advantage of shale gas - CEO

28 October 2010 20:23  [Source: ICIS news]

HOUSTON (ICIS)--US major Dow Chemical plans to secure more sources of on-purpose propylene as the development of shale gas could give the company a huge feedstock advantage, chief executive Andrew Liveris said on Thursday.

On-purpose propylene production uses propane as a feedstock versus refinery-sourced propylene, a co-product of gasoline. The latter accounts for about 60% of US propylene supply.

A shift towards propane-based propylene would give Dow a large cost advantage, especially given the advent of shale gas, Liveris said during an earnings conference call.

Dow is enjoying such an advantage with its ethylene crackers, which rely mostly on natural gas liquids (NGLs) instead of naphtha for feedstock.

"You can expect us to be more and more active on alternative ways to get propane into the mix," Liveris said.

Already, Dow is taking half of the output from the new 544,000 tonne/year on-purpose propylene plant built by Petrologistics, Liveris said. The first shipment arrived within the past week.

"That will help us a lot on sourcing propylene that is back-integrated - so to speak - into the NGL mix versus tied to the refining pool," Liveris said. "It will give us an advantage that we didn't have before."

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By: Al Greenwood
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