Dow Chemical to build new US cracker for start-up in 2017

21 April 2011 16:31  [Source: ICIS news]

Dow Chemical Freeport complex in Texas TORONTO (ICIS)--Dow Chemical plans to build a world-scale ethylene plant on the US Gulf coast for start-up in 2017, the US-based chemicals major said on Thursday.

The plant will be part of a plan to integrate Dow’s petrochemicals business with feedstock opportunities from the US shale gas in the Marcellus and Eagle Ford shale regions, Dow Chemical said.

Dow said it is finalising plans for the ethylene plant for start-up in 2017.

Dow is also planning a world-scale on-purpose propylene plant in Texas, for start-up in 2015, it said.

“The improved outlook for US natural gas supply from shale brings the prospect of competitively priced ethane and propane feedstocks to Dow - and the promise of new manufacturing jobs to America,” said Jim Fitterling, Dow executive vice president and president of corporate development and hydrocarbons.

“Our plan is to further integrate Dow’s businesses with the advantaged feedstocks, based on shale gas deposits and long-term ethane and propane supply agreements,” he said.

These actions would strengthen the competitiveness of Dow’s performance plastics, performance products and advanced materials businesses, Fitterling added.

In addition to plans for new ethylene and propylene plants, Dow is preparing to restart its ethylene plant at St Charles, near Hahnville, Louisiana, by the end of 2012, it said.

Dow also plans to improve ethane feedstock flexibility for an ethylene cracker at Plaquemine, Louisiana in 2014, and to increase ethane feedstock for an ethylene cracker in Texas in 2016, it said.

For propylene, Dow is exploring an option to commercialise its own technology to produce propylene from propane, with the potential start-up of a new production unit in 2018, it added.

Dow said it plans to supply the required ethane and propane feedstock for these projects through “a variety of supply arrangements”.

Possible supply option include a joint venture fractionator in Texas; supplies from existing fractionators; supply from future new fractionators to be built within the industry; and potential supply deals from various shale gas opportunities such as the Eagle Ford and Marcellus shale regions.

Dow has signed ethane and propane supply contracts based on the Eagle Ford shale gas (in Texas) and is pursuing several more agreements from this area, it said.

In addition, Dow has signed a memorandum of understanding with a subsidiary of Range Resources for long-term supply agreement for the delivery of ethane from the Marcellus Region in southwest Pennsylvania to Dow’s existing operations in Louisiana, it said.

“As the largest consumer of propylene in North America, Dow has a unique opportunity to invest aggressively for on-purpose propylene production from propane,” Fitterling said.

“Additionally, Dow is the largest producer of ethylene in North America, which provides capabilities to increase our use of ethane in existing ethylene production units - and to grow,” he said.

The planned projects and investments would increase Dow’s capability to consume ethane, while maintaining the company’s feedstock flexibility, he added.

In a conference call in February, Dow CEO Andrew Liveris said that Dow was planning to increase its ethane sourcing and cracking capabilities in the US.

For more on Dow Chemical and other producers visit ICIS company intelligence

By: Stefan Baumgarten
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