(Thursday afternoon update adds details and
By Ben DuBose
HOUSTON -- Dow Chemical said Thursday that it will build a
world-scale ethylene plant at its chemical hub in
Freeport, Texas, as part of a plan to further connect US
operations with cost-advantaged feedstocks available from increasing
US shale gas supplies.
is projected to start up in 2017, the company said, noting
that feedstock supply arrangements are in
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, said Andrew N.
Liveris, Dow CEO.
The new cracker in Freeport, located about 45
miles southeast of Houston on the Gulf of Mexico coast,
will have a capacity of 1.5 million tpy and be able to use both
ethane and propane as feedstock.
"Dows announcement is further evidence that the chemistry
industry is a growth engine helping to revitalize
Americas manufacturing sector, said Cal Dooley, CEO
of the American Chemistry Council (ACC) trade group.
Thanks to abundant, affordable natural gas, the
nations chemical companies have entered an era of renewed
global competitiveness which can help generate new domestic
investment, jobs and manufacturing exports," Dooley
"Its great news for the many industries that rely on
chemistry and plastics, including auto manufacturing, construction, agriculture, health
care, and technology.
The new ethylene facility at Dow Texas Operations will
employ up to 2,000 workers at its construction peak, the company
Over the next five to seven years, Dow estimates that the project, together with all other
planned projects in its US investment plan, will employ up to
4,800 workers during peak construction and support over 35,000
jobs in the broader US economy.
The primary competition to
host the Dow cracker came from Louisiana, according to Texas
Governor Rick Perry, who spoke at a Thursday ceremony in
"Louisiana is always going to be a competitor when it comes to
the petrochemical industry," said Perry,
who added that the project would cost $1.7
For selecting Texas as the site, Dow will receive $1
million through the Texas Enterprise Fund, he said.
"This is the type of environment that [companies] want to
be associated with," said Perry. "This is where they want
to do business."
Ultimately, Dow's current base in Freeport
also seemed to play a role in the decision.
Dow Texas Operations in Freeport is Dows largest
integrated manufacturing site worldwide and the largest
single-company chemical complex in North America, the company
With 4,200 employees and 3,000 contractors on site daily,
Dow Texas Operations currently manufactures 44 percent of Dow
products sold in the US and more than 20 percent of Dow
products sold globally.
Dow cites favorable US market dynamics
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, said Liveris.
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
Dow said the decision to build an ethylene plant in Freeport
marks a significant milestone in its strategy to further
develop the competitive advantage for its performance plastics,
performance materials and advanced materials businesses by
expanding access to low-cost natural gas-based feedstocks.
Later this year, Dow is expected to announce details
of new ethylene derivative units to be built alongside the
cracker. At least one will produce polyethylene (PE).
The outlook for advantaged US natural gas was a
significant factor in Dows decision to invest $4 billion
to grow our overall ethylene and propylene production
capabilities in the US Gulf Coast region, said Jim
Fitterling, Dow executive vice president and president of feedstocks and energy and corporate
Today, 70 percent of the companys global
ethylene assets are in regions with cost advantaged feedstocks - and weve seen the
benefits this advantage provides given oil-based naphtha margin
pressure in Europe and Asia, Fitterling
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
Other Dow US petrochemical projects
As part of that strategy, Dow is restarting a cracker near
Hahnville, Louisiana. Dow said Thursday that process is
progressing as planned, and the unit should be on stream at the
end of this year.
Earlier this year, Dow said its board of directors had
authorized capital to finalize detailed engineering and
purchase long lead-time equipment for a world-scale propylene
facility, also to be constructed in Freeport.
Basic engineering work for the new on-purpose propylene
facility has commenced, and the project is on track to start up
production in 2015.
Last December, Dow and Honeywells UOP signed a technology licensing agreement,
enabling on-purpose propylene production.
Under the terms of that deal, Dow will license UOP's
proprietary UOP C3 Oleflex process technology for manufacturing
on-purpose propylene from propane, a process known as propane
Dow also signed catalyst supply and performance guarantee
agreements with UOP.
All photos courtesy of Dow Chemical. For more on this
story, visit Dow's website by clicking here.