Dow to build new ethylene production plant at Texas operations to enhance USGC advantage

20-Apr-12
The Dow Chemical Company will construct a new world-scale ethylene production plant at Dow Texas Operations in Freeport, TX, 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. 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. "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," said 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." "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," said Jim Fitterling, Dow Executive Vice President and President of Feedstocks & Energy and Corporate Development. "Today, 70% 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. Projects announced as part of the Company's U.S. Gulf Coast investment plan are moving forward according to schedule. 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. In March, 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.
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