Dow nears start of construction on Freeport ethane cracker

17:14 PM | June 25, 2014 | Robert Westervelt

Dow Chemical will start constructing its previously announced, 1.5-million m.t./year Freeport, TX, ethylene plant on 30 June. The project, which received final permitting approval from EPA in May, remains on track for start-up in the first half of 2017, Dow says.

The ethylene unit will feed several downstream investments in performance plastics, including a 200,000-m.t./year metallocene ethylene–propylene diene monomer unit; a 320,000-m.t./year plant for high-melt specialty index elastomers used in hot melt adhesives; a 400,000-m.t./year enhanced polyethylene (PE ) unit serving high-performance flexible packaging and hygiene and medical markets; and a 350,000-m.t./year low-density PE unit serving protective packaging and power transmission markets.

The Gulf Coast investments are projected to deliver $2.5 billion/year in Ebitda once fully operational, Dow says. “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,” says Dow chairman and CEO Andrew Liveris.

In total, Dow’s US Gulf Coast investments in Texas and Louisiana will employ 5,000 workers during peak construction. The projects announced for Freeport represent the majority, with 4,000 required to construct feedstock, derivative, and supporting infrastructure projects.

“When combined with our on-purpose propylene [propane dehydrogenation] 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,” says Jim Fitterling, executive v.p./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.”