Dow Chemical set to begin construction on new Texas ethane cracker

Dow Chemical will begin construction on June 30 of its previously-announced world-scale ethylene production facility in Freeport, Texas, the company announced on Wednesday.

This represents a prominent milestone in the company delivering on its strategy to invest in a performance-based portfolio of technology-enabled businesses, according to Dow officials. 

The significant investment in Dow’s Texas operations remains on track and on-plan for start-up in the first half of 2017, and will employ up to 2,000 workers during construction.

“This world-scale ethylene facility is a foundational element in Dow’s strategy to utilize low-cost and advantaged shale gas feedstocks to enable growth in key value-add market-driven businesses,” said Andrew N. Liveris, CEO of Dow. “Collectively, Dow’s US Gulf Coast investments serve as an integral component of our global growth strategy, where we are leveraging our first-mover advantage to deliver significant shareholder value, enabling the company to achieve our near-term $10 billion EBITDA goal and beyond.”

With a nameplate capacity of approximately 1.5 million tpy, Dow’s new ethylene production facility is part of a multi-billion dollar investment. Alongside previously announced plastics and elastomers facilities, this will support market growth and expansions of Dow’s industry leading-leading performance plastics franchise.

“When combined with our on-purpose propylene PDH project, which is more than 30% complete, this ethylene production facility takes Dow yet another step closer to realizing the full financial benefit of our Gulf Coast investment effort,” said Jim Fitterling, Dow's executive vice president of feedstocks, energy and performance plastics. 

“This investment will connect cost-advantaged raw materials to many of the company’s highest-margin downstream businesses – including performance plastics – businesses that also consistently deliver a high return on invested capital. Once fully operational, our Gulf Coast investments are projected to deliver an estimated $2.5 billion in EBITDA and will serve as a solid base for long-term growth while further strengthening Dow’s market competitiveness.”

In total, Dow’s comprehensive US Gulf Coast investments in Texas and Louisiana will employ 5,000 workers during peak construction. The projects announced for the Freeport site represent the majority of those workers, with 4,000 required for construction of multiple feedstocks, derivatives and supporting infrastructure projects.

Dow Texas Operations in Freeport is Dow’s largest integrated manufacturing site worldwide and the largest chemical complex in North America with more than 4,200 employees and 3,800 contractors on site daily.