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 “?xml:namespace>
“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
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
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.
Dow expects its US Gulf coast expansions will bring in $2bn/year in additional EBITDA by 2017.
($1 = €0.77)
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