Dow Chemical Co. late Monday made good on some of the “opportunities” that have come its way with the U.S. natural gas revolution by applying for a federal air emissions permit to build a $1.7 billion ethylene facility in Freeport, TX, which would be the chemical manufacturer’s biggest in the world.
The Midland, MI-based company said in its application to the U.S. Environmental Protection Agency that construction is scheduled to begin in January 2014 with start up in 2017. The facility would have capacity to make 1.5 million tons of ethylene a year, according to Dow, which is North America’s largest consumer of propylene and the largest producer of ethylene.
Last year Dow said it would expand its chemicals operations along the Gulf Coast and build a world-class ethylene facility (see Daily GPI, April 25, 2011). The company plans to invest a total of $4 billion in Texas and Louisiana through 2017 to boost earnings by at least $2 billion a year once the new ethylene plant begins operations.
Dow’s news follows by one week South Africa’s Sasol Ltd.’s announcement to build the second largest gas-to-liquids plant in the world in Westlake, LA, at a cost of up to $21 billion (see Daily GPI, Dec. 4). Sasol said it also was taking advantage of low-cost gas supplies.
Dow said its expansions are planned because and in support of cheap U.S. natural gas. Last week CEO Andrew Liveris, an advocate for keeping U.S. gas at home, criticized the recent Department of Energy-sponsored study that supports some liquefied natural gas exports, calling the report “flawed, misleading and based on outdated, inaccurate and incomplete economic data” (see Daily GPI, Dec. 10; Dec. 6).
Dow executive George Blitz told NGI in October that the company had identified more than 90 capital investment projects with a combined investment of about $80 billion that were in planning phases nationwide — all possible because of abundant U.S. gas supplies (see Daily GPI, Oct. 26).
Last year when Dow announced its Gulf Coast expansion plans, it also signed a memorandum of understanding with a subsidiary of Range Resources Corp. for Range to deliver ethane supplied from the Marcellus Shale in Pennsylvania to existing chemical operations in Louisiana. Officials said they also had ethane and propane supply contracts for Eagle Ford Shale gas and were pursuing several other supply agreements.
Dow’s Freeport facility is not the only chemicals facility on the drawing board for the Gulf Coast region. In late April Chevron Phillips Chemical Co. LP selected a site near Old Ocean, TX, for two proposed polythethylene plants that would have annual capacity of 500,000 metric tons or 1.1 billion pounds (see Daily GPI, May 1).
ExxonMobil Corp. in September also said it would spend $200 million to expand two chemical and lubricant plants in Baton Rouge and Port Allen, LA, that were to begin by the end of this year. When construction is completed in 2014, 45 full-time jobs would be added to the integrated ExxonMobil facilities, which now employ 2,600. The Baton Rouge plant would be the world’s largest producer of finished lubricants, which are used in motor oils, gear oils and greases, as well as specialized lubricants for aviation, marine and industrial applications. The Port Allen site would include a state-of-the-art blending center.
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