Dow Chemical Texas propylene project moves ahead

Dow Chemical will construct a new propylene production facility at Dow Texas Operations, US, following the authorisation of capital by the company's board of directors.

The company will use the capital to finalise detailed engineering and purchase long lead-time equipment for the new facility.

The move is believed to represent the company's plans to increase its ethylene and propylene production and connect its operations with low-cost feedstock opportunities available from increasing supplies of US shale gas.

Dow Chemical executive vice president and Feedstocks & Energy and Corporate Development president Jim Fitterling said: "This authorization marks yet another significant milestone in Dow's comprehensive plan to create competitive advantage for our downstream performance materials and advanced materials businesses by further connecting our US operations with cost-advantaged feedstocks.

"This investment directly supports Dow's transformational strategy to enhance its feedstock flexibility and integration strength, and positions the Company for growth in attractive markets and geographies."

The on-purpose propylene production facility is expected to commence production in 2015.

In December 2011, Dow signed a technology licensing agreement with Honeywell company, UOP, to use UOP C3 Oleflex process technology for manufacturing on-purpose propylene from propane.

Dow also signed catalyst supply and performance guarantee agreements with UOP.

Dow Chemical Olefins, Aromatics and Alternatives vice president Brian Ames said: "The availability of cost-advantaged feedstocks from US shale gas developments represents a value-creating opportunity for our downstream businesses, and Dow is capitalising on this.

"Our Company was among the first in our industry to declare a comprehensive plan to take advantage of the increasing supplies of U.S. natural gas liquids, and we remain on track to implement that plan, which will create thousands of domestic jobs."