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

Plastics help designers bring home the gold

July 22, 2014 2:15 pm ET

Products with polymer content received multiple gold recognitions in the 2014 International Design Excellence Awards.    More

Image

Munson Machinery expanding assembly, testing operations

July 22, 2014 2:02 pm ET

Munson Machinery Co. Inc. is expanding its headquarters factory by about one-third in Utica, N.Y., where the company makes mixing, blending and size-...    More

Image

DSM planning North American nylon plant

July 22, 2014 11:41 am ET

Materials firm Royal DSM NV plans to build a new nylon resin plant in North America, but no decision has been made on the plant's exact location.    More

Image

Design group Hexagon buys Vero Software to upgrade CAM capabilities

July 22, 2014 9:51 am ET

Stockholm-based Hexagon AB, a design technology company, has announced its acquisition of Vero Software, a leader in computer aided...    More

Image

Windmöller & Hölscher looking to continued growth in China

July 21, 2014 3:40 pm ET

With 2013 global sales of 600 million euros, China has grown into an important export market for Windmöller & Hölscher KG, second only to the United S...    More

Market Reports

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Plastics Recycling Market Review & Outlook 2014

This special report from Plastics News examines the North American plastics recycling industry and provides insight into indicators that impact market viability, including Resin pricing trends for virgin and recycled market material and historical Resin production trends for post- consumer and industrial waste.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

More Events