Dow Chemical DOW announced, last Thursday, that it is conducting a planned outage at its new propane dehydrogenation unit (“PDH”) in Freeport, TX, to repair an exchanger that has been safely and effectively managed since the start-up of the facility. The PDH unit commenced commercial operations in Dec 2015.
Dow, earlier this month, reported that the PDH unit has successfully completed performance test and is operating at full capacity, marking another key milestone in the company’s plans to integrate its U.S. operations with cost-advantaged feedstocks from increasing U.S. shale gas supplies.
The world-scale propylene production plant has a capacity of 750 kilotons per annum (KTA), making it the biggest on demand propylene facility of its kind. The PDH unit represents a major part of Dow’s roughly $4 billion U.S. Gulf Coast investments. The investment supports the company’s strategy to enable cost-advantaged growth in rapidly growing regions.
Dow, last week, said that MEGlobal is planning to build a new world-scale monoethylene glycol (“MEG”) plant at the former’s Oyster Creek site in Freeport. MEGlobal is a fully-owned subsidiary of EQUATE Petrochemical Company, a joint venture between Dow, Petrochemical Industries Company (“PIC”) of Kuwait, Boubyan Petrochemical Company (“BPC”) and Qurain Petrochemical Industries Company (“QPIC”). The new facility, which is expected to come online in mid-2019, would benefit from a long-term ethylene supply agreement with Dow from its new Freeport ethylene cracker.
Dow is making progress with the construction of the new ethylene cracker (more than 40% complete) that is on track to be operational in second-quarter 2017. This new cracker (converts ethane into ethylene) represents a major part of Dow’s Texas Operations in Freeport. Dow will also complete ethane feedstock flexibility for an ethylene cracker at its Louisiana Operations site. The cracker is on track for start-up in the second half this year.
Dow is seeing significant feedstock advantage in North America. The company’s investments in the U.S. Gulf coast and Middle East (including the Sadara joint venture) are focused on boosting this advantage.
Dow Chemical is a Zacks Rank #3 (Hold) stock.
Better-ranked companies in the diversified chemical space include Arkema S.A. ARKAY, Sinopec Shanghai Petrochemical Co. Ltd. SHI and Koninklijke DSM N.V. RDSMY. While both Arkema and Sinopec Shanghai sport a Zacks Rank #1 (Strong Buy), Koninklijke DSM carries a Zacks Rank #2 (Buy).
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