US Dow touts cost-advantaged feedstocks as foundation for growth

04 October 2011 21:37  [Source: ICIS news]

NEW YORK CITY (ICIS)--Dow’s position in regions rich with cost-advantaged feedstocks has given the company a stable foundation, which will deliver growth for decades, the CEO of the US-based chemicals giant said on Tuesday.

Over 70% of Dow’s global ethylene assets are in Canada, Argentina, Kuwait and the US, where ethane-based production has already become dramatically more cost-competitive because of shale gas developments.

“These dynamics have brought US Gulf coast ethane-based assets down the cost curve,” Dow CEO Andrew Liveris said at the company’s Investor Day.

He said fractionation capacity for ethane production is growing a rate faster than the petrochemical industry can consume it.

“This means ethane is expected to go long next year and stay there,” Liveris said. “In fact the futures market is pricing in a significant 20% decline in ethane over the next 12 months.

“All this demonstrates how Dow’s feedstock strength will serve as a significant contributor to growth and underscores the values of the investments we announced recently to further enhance our feedstock flexibility," he added.

“These actions will increase our ethylene production capabilities by as much as 20% in the US over the next two to three years and allow us to deliver more than 90% of our North American ethylene from ethane.”

For more on Dow visit ICIS company intelligence

By: Bobbie Clark
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