Dow Chemical to announce location of new ethylene plant in April

Dow Chemical will unveil the chosen location of its proposed US ethylene plant next month, CEO Andrew Liveris said Thursday.

Dow last October began a feasibility study for the construction of a world-scale ethylene plant that would begin service in 2017.

"We have invested $4 billion in new facilities in the US," Liveris said at the CERAWeek 2012 conference in Houston. "We are restarting an ethylene plant that was idled and we will build a new plant. We will announce its location in April."

The petrochemicals company has already identified Freeport, Texas, as the site for its world-scale propane dehydrogenation unit, due for startup in 2015.

The planned ethylene plant is the crown jewel of an ambitious olefins project by Dow to increase ethylene production in the US by as much as 2.3 million mt/year by 2017.

In addition to the greenfield projects, Dow plans to restart an idled cracker at its St. Charles complex in Hahnville, Louisiana, by the end of the year and improve feedstock flexibility for crackers at its Plaquemine, Louisiana, and Freeport plants no later than 2014.

Dow's ethylene plant would come online around the same time as competitor ChevonPhillips Chemical's new ethane cracker in Bayport, Texas.

Liveris heralded the deluge of cheap shale gas supplies as the main driver for the resurgence in the US petrochemicals industry.

Rising energy prices in the US over the last few years had driven petrochemical companies offshore.

"For most of the last decade, one of the big drivers of companies like ours going overseas was energy offshoring," he said. "For Dow, energy is one of our biggest costs. In 2011, it amounted to $20 billion or 850,000 barrels of oil equivalent a day --- roughly the [consumption] equivalent of my native country of Australia."

Cheaper gas has lured the industry back with several companies, such as Dow, ChevronPhillips, LyondellBasell, Ineos, Williams, Westlake Chemical and BASF-Total, planning expansions of existing plants or restarting idled units. Using that cheaper gas domestically is a better bet than liquefied natural gas exports, Liveris said.

"You should take that gas, transform it into high-value products and export that at a much higher profit," he said.

While US LNG exports seem to be inevitable and as much as 5% of domestic production could be shipped overseas, Liveris sounded a cautionary note: "If you let the world oil price enter this country through exports, you will cripple this country."