Dow will not seek ownership partners for US cracker − Liveris

03 December 2012 19:37  [Source: ICIS news]

NEW YORK (ICIS)--US-based Dow Chemical will not seek ownership partners for its 1.5m tonne/year world-scale ethane cracker on the US Gulf coast but expects to have off-take agreements that will reduce capital outlays, its chief executive said on Monday.

“We are not into condo crackers,” said CEO Andrew Liveris, referring to the term for a joint venture cracker project. “We think you need a clear manager and integrator for the facility.”

“However, we can secure large contracts for ethylene and derivatives - whether it involves PE [polyethylene] or not - to defer capital,” he added at a media event at Dow’s annual investor day meeting.

The large off-take agreements could involve a capital contribution up front from the buyers of the product.

“We have a number of solicitations on this,” noted Liveris.

Dow’s cracker is estimated to cost around $2bn (€1.5bn), according to Deutsche Bank analyst David Begleiter.

The cracker, code-named “Texas 9” by Dow and to be built in Freeport, Texas, is on track for completion in 2017, the CEO said.

“We are in the permitting process, and I believe we will be the second cracker to receive a permit,” said Liveris.

“We are in the middle of the FEED [front-end engineering and design] on the cracker, as well as for the PDH [propane dehydrogenation] unit,” he added.

The PDH plant, also to be built in Freeport with start-up by mid-2015, would bring on 750,000 tonnes/year of propylene capacity.

US-based engineering and construction firm Fluor is the contractor for both the cracker and the PDH project.

Also on the US Gulf Coast, Dow is on track to restart its St Charles, Louisiana, cracker by the end of 2012.

The restart of the 390,000 tonne/year cracker is expected to add $150m in earnings before interest, tax, depreciation and amortisation (EBITDA) in 2013.

At its Plaquemine, Louisiana, cracker, Dow continues to work on increasing ethane cracking capability by 2015.

Dow expects its US Gulf coast expansions will bring in $2bn/year in additional EBITDA by 2017.

($1 = €0.77)

By: Joseph Chang
+1 713 525 2653

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