Dow Chemical Co. plans to increase ethylene and propylene production, and integrate its U.S. operations into the expanding supply of natural gas feedstocks from the Marcellus and Eagle Ford shale regions.
The improved outlook for U.S. natural gas supply from shale brings the prospect of competitively priced ethane and propane feedstocks to Dow and the promise of new manufacturing jobs to America, Executive Vice President Jim Fitterling said in a news release.
Our plan is to further integrate Dow's businesses with the advantaged feedstocks, based on shale gas deposits and long-term ethane and propane supply agreements.
The company expects the decision to strengthen the competitiveness of its performance plastics, performance products and advanced materials businesses.
On the ethylene side, the Midland-based company plans to:
* Restart an ethylene cracker at its St. Charles operations site near Hahnville, La., by the end of 2012.
* Improve ethane feedstock flexibility for an ethylene cracker at its Plaquemine, La., site in 2014.
* Increase ethane feedstock flexibility for an ethylene cracker at its Dow Texas operation in 2016.
* Build a new ethylene production plant in the U.S. Gulf Coast, for startup in 2017.
On the propylene side, Dow plans to:
* Build a new propylene production facility at its Dow Texas site, for startup in 2015.
* Explore an option to commercialize its own technology to produce propylene from propane, with the potential startup of a new production unit in 2018.
Dow also announced that it has signed a memorandum of understanding with a subsidiary of Range Resources Corp., based in Fort Worth, Texas, to enter into a long-term supply agreement for ethane from the Marcellus region in southwest Pennsylvania to Dow's existing operations in Louisiana.
All of these investments, combined with Dow's planned agreement with Range Resources, will dramatically increase our capability to consume ethane, while maintaining our industry-leading feedstock flexibility, Fitterling said.