Dow Chemical said Wednesday that its board of directors has authorized capital to finalize detailed engineering and purchase long lead-time equipment for a new, world-scale propylene production facility to be constructed at Dows site in Freeport, Texas.
This represents the latest move in a strategy to increase ethylene and propylene production and connect operations with low-cost feedstock opportunities available from increasing supplies of US shale gas, the company said.
This authorization marks yet another significant milestone in Dows comprehensive plan to create competitive advantage for our downstream Performance Materials and Advanced Materials businesses by further connecting our US operations with cost-advantaged feedstocks, said Jim Fitterling, executive vice president of Dow and president of Feedstocks & Energy and Corporate Development.
This investment directly supports Dows transformational strategy to enhance its feedstock flexibility and integration strength, and positions the company for growth in attractive markets and geographies, he added.
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, 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 C3 Oleflex process technology for manufacturing on-purpose propylene from propane.
Dow also signed catalyst supply and performance guarantee agreements with UOP.
On-purpose propylene production from propane will create better economic value for Dow compared with high-priced purchased propylene, the company said.
The availability of cost-advantaged feedstocks from US shale gas developments represents a value-creating opportunity for our downstream businesses, and Dow is capitalizing on this, said Brian Ames, vice president of Olefins, Aromatics and Alternatives.
Our company was among the first in our industry to declare a comprehensive plan to take advantage of the increasing supplies of US natural gas liquids, and we remain on track to implement that plan, which will create thousands of domestic jobs.
The project is expected to create 1,300 jobs at its construction peak.
Cover photo courtesy of Greenpeace