The Dow Chemical Company announces that the company will construct a new world-scale ethylene production plant at Dow Texas Operations in Freeport, Texas, as part of Dow’s previously announced comprehensive plan to further connect its U.S. operations with cost-advantaged feedstocks available from increasing supplies of U.S. shale gas.
The new ethylene production facility
at Dow Texas Operations will employ up to 2,000 workers at its construction
peak. Over the next five to seven years, Dow estimates that this project,
together with all other planned projects announced as part of the Company’s
comprehensive U.S. investment plan, will employ up to 4,800 workers during peak
construction and support over 35,000 jobs in the broader U.S. economy.
“For the first time in over a decade, U.S.
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,” says Andrew N. Liveris, Dow Chairman and Chief
Executive Officer. “Dow is proud to have been among the first manufacturing
companies to declare a comprehensive plan to take advantage of these favorable
market dynamics, further enhancing our footprint in the Americas and the
profitability of our global businesses while supporting economic revitalization
in the communities in which we operate. 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.”
This decision marks another
significant milestone in the Company’s strategy to further develop the
competitive advantage for Dow’s Performance Plastics, Performance Materials and
Advanced Materials businesses by expanding access to low-cost natural gas-based
feedstocks, which are used in the production of Dow products that are essential
to over a dozen consumer markets.
“The outlook for advantaged U.S. natural gas
was a significant factor in Dow’s decision to invest $4 billion to grow our
overall ethylene and propylene production capabilities in the U.S. Gulf Coast
region,” says Jim Fitterling, Dow Executive Vice President and President
of Feedstocks & Energy and Corporate Development. “Today, 70 percent of the
Company’s global ethylene assets are in regions with cost advantaged feedstocks
– and we’ve seen the benefits this advantage provides given oil-based naphtha
margin pressure in Europe and Asia. This plan represents a game-changing move
to strengthen the competitiveness of our high-margin, high-growth derivatives
businesses as we continue to capture growth in the Americas.”
Dow Texas Operations in Freeport is
Dow’s largest integrated manufacturing site worldwide and the largest
single-company chemical complex in North America. With 4,200 employees and
3,000 contractors on site daily, Dow Texas Operations currently manufactures 44
percent of Dow products sold in the United States and more than 20 percent of
Dow products sold globally.
Dow Progresses Comprehensive Plan
Projects announced as part of the
Company’s U.S. Gulf Coast investment plan are moving forward according to
The new ethylene production unit
project is currently on track for start-up in 2017, and Dow continues to
develop feedstock supply arrangements for this new asset.
On March 7 Dow announced that the Company’s Board of
Directors had authorized capital to finalize detailed engineering and purchase
long lead-time equipment for a new, world-scale propylene production facility
to be constructed at Dow Texas Operations. Basic engineering work for the new
on-purpose propylene production facility at Dow Texas Operations has commenced,
and the project is on track for production start-up in 2015.
In December 2011, Dow and UOP LLC, a
Honeywell company, signed a technology licensing agreement, enabling on-purpose
propylene production at the facility. Under the terms of this agreement,
Dow will license UOP's proprietary UOP C3 Oleflex TM process technology
for manufacturing on-purpose propylene from propane. Dow also signed catalyst
supply and performance guarantee agreements with UOP.
Recomissioning work on an ethylene
production unit at Dow’s manufacturing site near Hahnville, Louisiana is
progressing as planned, and the unit is on track to restart at the end of this
The Dow Chemical Company