UpdateUS Dow to build world-scale cracker in Freeport, Texas

19 April 2012 14:49  [Source: ICIS news]

(releads and updates throughout)

By Nigel Davis

DowLONDON (ICIS)--Dow Chemical will build its new world-scale ethylene plant at its largest production site in Freeport, Texas, (Dow Texas Operations) the US-headquartered, broadly-based chemicals producer said on Thursday.

The cracker is the key project in the company’s plan to connect its US operations to cost-advantaged gas feedstock coming from the further exploitation of US shale gas deposits.

“For the first time in over a decade, US natural gas prices are affordable and relatively stable, attracting new industry investments and growth and putting us on the threshold of an American manufacturing resurgence,” Dow CEO Andrew Liveris said.

“Constructing this new ethylene cracker at Dow Texas Operations will create a long-term advantage for our downstream businesses and for our company as a whole, and the benefits will accrue not only to Dow but to the state and national economy.”

Dow said that the cracker project was on-track for start-up in 2017 and that it continues to develop feedstock supply arrangements for the new asset.

Dow said a year ago that it was developing a plan to use cost-advantaged gas feedstocks from shale to strengthen the competitiveness of many of its downstream businesses.

"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," the company’s then head of corporate development and hydrocarbons, Jim Fitterling, said at the time.

"These actions will strengthen the competitiveness of our Performance Plastics, Performance Products and Advanced Materials businesses, for example the Elastomers product family and the full Acrylates chain, as we continue to capture growth in the Americas," he added.

Under that plan, Dow is in the process of restarting a cracker near Hahnville in Louisiana. It is due on-stream by the end of this year.

In March 2012, the company said that capital had been authorised and detailed engineering finalised for a world scale propane dehydrogenation (PDH) unit to be constructed in Freeport. Long lead-time equipment for the project is being purchased and the plant is scheduled for 2015 start up.

In December 2011, Dow signed a technology agreement with Honeywell’s UOP, to license that company’s C3 Oleflex technology to produce on-purpose propylene from propane. The plant would be able to produce 750,000 tonnes/year of polymer grade propylene..

Dow is the largest consumer of propylene in North America and the region’s largest producer of ethylene.

It has sought to acquire supplies of ethane and propane for its olefins projects through a variety of supply agreements to tap into the increased availability of the natural gas liquids (NGLs) from deposits such as Eagle Ford in Texas and the Marcellus shale in Pennsylvania.

Dow said that 2,000 workers would be employed on the new plant at its construction peak. This and other projects will employ 4,800 at the peak and support more than 35,000 jobs in the broader US economy, it added.

Fitterling said on Thursday that the company would invest $4bn (€3bn) overall to grow its ethylene and propylene capabilities in the US Gulf Coast region.

Graeme Paterson contributed to this article

By: Nigel Davis
+44 20 8652 3214

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