Dow plans Texas ethylene plant based on shale gas

Dow Chemical Co. announced plans to build a 1.5-million tonne/year ethylene plant at its Texas operations in Freeport under a strategy reported a year ago of integrating US operations with feedstocks available from increasing production of natural gas from shales.

As part of that strategy, the company said last month its board had approved spending for detailed engineering and the purchase of long-lead time equipment for a new propylene plant at its Freeport complex, where, according to OGJ’s annual Ethylene Survey, it now has two ethylene plants with total capacity of 1.64 million tpy (OGJ, July 4, 2011, p. 100). It also is restarting an ethylene plant and enhancing ethane flexibility of a second cracker in Louisiana, where it has operations in six locations.

In recent months, INEOS Olefins & Polymers USA, Williams Olefins LLC, and Chevron Phillips Chemical Co. LP have announced plans for US Gulf Coast olefins projects based on new supplies of feedstock from shale gas.

Dow Chief Executive Andrew N. Liveris described the trend in a press statement about the new Freeport ethylene project.

“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,” he said.

Jim Fitterling, a Dow executive vice-president who also is president of its feedstocks and energy and corporate development divisions, said the lower price outlook for US gas was significant to the company’s decision to invest $4 billion to expand its overall US Gulf Coast ethylene and propylene production capabilities.

Dow said the new ethylene project is on schedule for a 2017 start-up as the company develops feedstock supply arrangements for the plant.

Cal Dooley, president of the American Chemistry Council in Washington, said access to low-cost ethane has made the US one of the world’s lowest-cost chemical producers.

“Thanks to abundant, affordable natural gas, the nation’s chemical companies have entered an era of renewed global competitiveness which can help generate new domestic investment, jobs, and manufacturing exports,” he said.

Contact Nick Snow at nicks@pennwell.com.

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