Dow Growing North American Businesses With Shale Gas Liquids

June 2011 Vol. 238 No. 6

Dow Chemical Company announced comprehensive plans to increase ethylene and propylene production and to integrate its U.S. operations into feedstock opportunities available from increasing supplies of shale gas in the Marcellus and Eagle Ford shale regions.

“The improved outlook for U.S. natural gas supply from shale brings the prospect of competitively priced ethane and propane feedstocks to Dow – and the promise of new manufacturing jobs to America,” said Jim Fitterling, Dow executive vice president and president of Corporate Development & Hydrocarbons.

“Our plan is to further integrate Dow’s businesses with the advantaged feedstocks, based on shale gas deposits and long-term ethane and propane supply agreements. These actions will strengthen the competitiveness of our Performance Plastics, Performance Products and Advanced Materials businesses, for example the Elastomers product family and the full Acrylates chain, as we continue to capture growth in the Americas.”

Dow plans to increase ethylene supply and increase its ethane-cracking capabilities at existing U.S. Gulf Coast facilities by:
* Restarting an ethylene cracker at the St. Charles operations site near Hahnville, LA by the end of 2012;
* Improving ethane feedstock flexibility for an ethylene cracker at the Louisiana operations site in Plaquemine, LA in 2014;
* Increasing ethane feedstock flexibility for an ethylene cracker at the Dow Texas operations site in 2016;
* Constructing a world-scale ethylene production plant in the Gulf Coast for start-up in 2017.
Dow plans to increase its propylene supply by:
* Constructing a world-scale, on-purpose propylene production facility at Dow Texas operations for start-up in 2015;
* Exploring an option to commercialize its own technology to produce propylene from propane, with the potential start-up of a new production unit in 2018.

Dow plans to supply the required ethane and propane for these projects through a variety of supply arrangements, including: a possible joint venture fractionator in Texas, supply from existing fractionators, supply from future new fractionators to be built within the industry, and potential supply deals from various shale gas opportunities such as the Eagle Ford and Marcellus shale regions. Dow has signed ethane and propane supply contracts based on the Eagle Ford shale gas and is pursuing more agreements from the area.

Dow signed a Memorandum of Understanding with a wholly owned subsidiary of Range Resources Corp. for a long-term supply agreement for ethane delivery from the Marcellus region in southwest Pennsylvania to Dow’s existing operations in Louisiana.

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