The Dow Chemical Co. has announced an initial agreement for long-term ethylene offtake for a new joint venture (JV) to be formed between Japanese firms Idemitsu Kosan Co. Ltd. and Mitsui & Co. Ltd.
Idemitsu and Mitsui will form the JV to construct and operate a world-scale, linear alpha olefins (LAO) unit on the US Gulf Coast.
This agreement is part of Dows strategy to integrate cost-advantaged feedstocks to support the profitable growth of the companys performance plastics franchise.
The JV will utilize an integrated supply of ethylene from Dows production grid on the US Gulf Coast to produce LAO used as comonomers throughout Dows high-value performance plastics franchise, and it will contribute significant capital for these rights.
Dow expects the agreement with the JV will enable a long-term supply and purchase relationship for LAO, which will enhance Dows high-value performance plastics franchise. This will better enable the franchise to serve several of Dow's fastest-growing market segments.
Location options for the LAO unit are currently being explored, with final investment locations to be determined at a later date. The JV is in the front-end engineering and design (FEED) phase and will complete this work in 2014. Construction and startup of the new unit is targeted for 2016.