DowDuPont Inc. has started production on a specialty polyethylene resin unit and on a new ethylene unit in Freeport, Texas.
The new unit will have annual production of almost 900 million pounds of Elite-brand enhanced PE and more than 3 billion pounds of new ethylene. More than 1 billion pounds of ethylene capacity are expected to be added to that unit, which officials said will make it the world's single largest ethylene site.
The startup was unaffected by Hurricane Harvey, which hit the Texas coast on Aug. 25, Diego Donoso, DowDuPont Inc.'s packaging and specialty plastics business president, told Plastics News in a Sept. 21 phone interview.
"Our team was very brave and they stayed safe," he said. "They did a phenomenal job, even with construction issues. We're very happy with the result."
The units were physically completed in June. They'll continue to ramp up through the third quarter and are expected to reach full rates in the fourth quarter of 2017.
Dow's Elite PE resins are used in multiple types of flexible packaging applications for food, personal hygiene products and industrial packaging. "We can be very flexible with what the market wants," Donoso said. "We can do injection molding or packaging or other high value-added applications."
Dow and several other firms are adding PE and ethylene capacity in the region because of newfound supplies of affordable natural gas feedstock. Dow is investing a total of $6 billion in its U.S. Gulf Coast projects.
In a news release, Andrew Liveris, DowDuPont's executive chairman, described the startup as "a monumental moment … as we advance our global growth strategy by fully deploying our unmatched molecular and physical integration."
Jim Fitterling, chief operating officer of DowDuPont Materials Science, added that the new ethylene unit "provides a solid, capital-efficient base in this attractive, feedstock-advantaged region."
Donoso said that one short-term impact of the storm would be temporarily selling more of the new Elite PE into the domestic market rather than as export. That step is expected to be temporary, lasting only until Dow's other PE units in the region are back at full production.
He added that the new PE is needed in export markets because PE from Dow's Sadara Chemical joint venture in Saudi Arabia, which sells material throughout the Middle East, Asia and Africa, already is "oversubscribed."
"Those pounds are gone," Donoso said. "We need to serve world demand, so this is great timing with the new capacity."
Officials added that in addition to supporting Dow's near-term capacity additions, the ethylene facility will also support further planned debottlenecks to unlock additional PE capacity. Other plastics-related expansions in the works for DowDuPont include:
• Almost 800 million pounds of new specialty low density PE for industrial and supply chain packaging applications by the end of the year.
• 440 million pounds of capacity for Next Generation Nordel-brand metallocene EPDM for higher-margin applications in transportation, infrastructure and consumer durables end markets in early 2018.
• 275 million pounds of bi-modal gas phase PE via a debottlenecking to produce more material for high-performance pipe and fitting applications, as well as caps and closures sometime in 2018.
• 700 million pounds of high melt index polyolefin elastomers for high-performance flexible packaging, transportation and consumer markets in late 2018.
• 1.3 billion pounds of PE — based on DowDuPont's solution process — for food and specialty packaging by 2022.
On Aug. 31, Dow Chemical Co. merged with DuPont Co. Both firms were major players in global plastics and chemicals markets. The new firm is co-headquartered in Midland, Mich., and Wilmington, Del. The two firms had combined sales of more than $72 billion in 2016.
Within 18 months, DowDuPont is expected to split into three separate publicly-traded firms, including one focused on materials. Dow's PE and ethylene units will be part of that new company.
