Dow Chemical to unveil site for proposed U.S. ethylene plant in April; site would start up in 2017, be the culmination of company's plan to boost its U.S. ethylene output to as much as 2.3 million tonnes/year by 2017

Graziela Medina Shepnick

Graziela Medina Shepnick

Mar 12, 2012 – Industry Intelligence

LOS ANGELES , March 9, 2012 () –

Dow Chemical Co. expects to announce the location for its proposed world-scale U.S. ethylene plant in April, said CEO Andrew Liveris on March 8, Platts reported the same day.

The Midland, Michigan-based petrochemicals giant began a feasibility study on the project last year and expects the plant will be put into service in 2017.

The plant would be the culmination of Dow’s plan to boost its U.S. ethylene output to as much as 2.3 million tonnes per year by 2017, reported Platts.

The company has invested US$4 billion in new U.S. operations and will restart the idled ethylene plant at its St. Charles complex in Hahnville, Louisiana, by the end of the year, said Liveris at the CERAWeek 2012 conference in Houston.

Dow also plans to improve feedstock flexibility at its crackers in Plaquemine, Louisiana, and in Freeport, Texas, where the company also will install a world-scale propane dehydrogenation unit that will start up in 2015, Platts reported.

At the same time as Dow plans to bring its new ethylene plant onstream, an ethane cracker being built by Chevron Phillips Chemical Co. is slated to start up in Bayport, Texas.

Cheap shale gas supply is the main catalyst for the U.S. petrochemical industry’s resurgence, as the sector had previously been driven offshore by rising energy prices in the U.S., said Liveris, reported Platts.

Energy is one of Dow’s biggest costs, amounting to $20 billion, or 850,000 barrels of oil equivalent per day, said Liveris.

Making use of that cheap gas domestically is “a better bet than liquefied natural gas exports,” as it can be “transformed to higher-value products and exported at a much higher profit,” he said, Platts reported.

In addition to Dow, Chevron Phillips, LyondellBasell Industries NV, Ineos Group, Williams Companies Inc., Westlake Chemical Co. and BASF-Total plan expansions at existing plants or restarts of units that were shut down.

Liveris cautioned that if the world oil price were to affect the U.S. via exports, it would “cripple this country.” Still, it seems inevitable that as much as 5% of U.S. liquid natural gas production could be shipped overseas, he said, reported Platts.

The primary source of this article is Platts, New York, New York, on March 8, 2012.

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