Dow Chemical picks Freeport, Texas, for new ethylene cracker

By Frank Esposito
Senior Staff Reporter

Published: April 19, 2012 6:00 am ET

Related to this story

Topics Materials, Suppliers

FREEPORT, TEXAS (April 19, 1:35 p.m. ET) — Dow Chemical Co. has chosen Freeport, Texas, as the site of a new plant making ethylene, a key plastics feedstock.

The cracker will be part of an overall investment of $4 billion in Dow’s ethylene and propylene production in the U.S. Gulf Coast, officials with Midland, Mich.-based Dow said in an April 19 news release. The unit is expected to open in 2017 and will employ 2,000 at the peak of construction.

The new cracker will have annual ethylene capacity of 3.3 billion pounds and will employ 150 when fully operational, a Dow spokeswoman said. The project could create as many as 1,200 jobs in the area, according to industry projections, she added. No increased polyethylene production has been announced as part of the Dow expansion.

Low prices for natural gas in the region played a role in Dow’s decision, since natural gas can be used to make ethane, which is then converted into ethylene.

“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,” Dow Chairman and CEO Andrew Liveris said in the release.

“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,” he added. “And the benefits will accrue not only to Dow, but to the state and national economy.”

The Freeport complex already ranks as Dow’s largest integrated manufacturing site worldwide and the largest single-company chemical complex in North America, officials said. The site currently employs 4,200 Dow workers, plus 3,000 contractors, and it accounts for 44 percent of Dow’s U.S. production and 20 percent of its global production across all product types.

Jim Fitterling, Dow executive vice president, said the outlook for advantaged U.S. natural gas “was a significant factor” in Dow’s investment. “Today, 70 percent of the company’s global ethylene assets are in regions with cost-advantaged feedstocks,” he added. “We’ve seen the benefits this advantage provides, given oil-based naphtha margin pressure in Europe and Asia.”

Liveris made the site selection announcement in Freeport on April 19, at a ceremony attended by Texas Gov. Rick Perry and other state and local officials.

Dow is one of the world’s largest plastics and chemicals makers. The firm posted sales of almost $60 billion in 2011, up almost 12 percent vs. 2010.

News of the site selection comes less than three weeks after Dow announced it was cutting 900 jobs worldwide and closing at least four plants making expanded polystyrene foam and polyurethane feedstocks. Officials said the job cuts and closings are the result of continued weakness in the European economy.

Dow is one of several petrochemical makers that have announced North American expansion plans because of newfound supplies of natural gas. In February, Formosa Plastics Corp. USA announced it would spend almost $2 billion to expand its plastics and petrochemicals site in Point Comfort, Texas.

Shell Oil Co. also will build a new cracker in western Pennsylvania – near the Marcellus Shale gas deposits – while Chevron Phillips Chemical Co. will build one in the U.S. Gulf Coast. Westlake Chemical Corp. and Nova Chemicals Corp. also will expand ethylene capacity at existing locations in the Gulf Coast and in western Canada. The Nova, Chevron Phillips and Formosa projects also include new PE capacity.


Comments

Dow Chemical picks Freeport, Texas, for new ethylene cracker

By Frank Esposito
Senior Staff Reporter

Published: April 19, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

UK legislators reject fracking moratorium

January 26, 2015 12:19 pm ET

UPDATED: Environmental campaigners turned their anger on the United Kingdom's Labour party Monday after a vote to impose a moratorium on fracking...    More

Image

Material Insights: PP production issues, preparing for NPE

January 26, 2015 1:38 pm ET

Production problems in Texas add more complication for polypropylene, Entek has new equipment ready to show compounders at NPE and we take a look...    More

Image

J6 Polymers to buy Stepan unit

January 26, 2015 12:22 pm ET

NORTHFIELD, ILL. — Stepan Co. plans to sell its specialty polyurethanes systems business to J6 Polymers LLC in a cash deal.    More

Image

Oxo-biodegradable lobby slams 'scaremongering'

January 26, 2015 12:16 pm ET

Single-use plastic carrier bags made from biodegradable material should be exempted from the government’s proposed 5p-a-bag levy in England,...    More

Image

2014 leaves some resin firms in the black while others struggle

January 23, 2015 2:37 pm ET

On the financial side, 2014 was good for Hexcel Corp., so-so for Celanese Corp. and it could have been better for Omnova Solutions.    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events