Volume 85 Issue 21 | p. 8 | News of The Week
Issue Date: May 21, 2007

Dow Advances Overseas Projects

Saudi and Chinese complexes are part of firm's overhaul of its commodity chemicals business
Department: Business
Saudi project will draw feedstocks from this Aramco refinery.
Credit: Saudi Aramco
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Saudi project will draw feedstocks from this Aramco refinery.
Credit: Saudi Aramco

DOW CHEMICAL is advancing two joint ventures aimed at unlocking sources of feedstocks and giving it access to developing markets.

The company has signed a memorandum of understanding for the construction of a massive joint venture with Saudi Arabian oil company Saudi Aramco near the eastern Saudi town of Ras Tanura. The partners aren't disclosing the cost of the project, but estimates of more than $20 billion have appeared in recent published reports.

Separately, Dow and Chinese coal mining company Shenhua are launching a two-year study of a plant that would make petrochemicals from coal. Slated for the central Chinese province of Shaanxi, the plant would convert coal into methanol, which in turn will be used to make ethylene, propylene, and other petrochemicals. The complex would include a chlorine unit and plants to make many other products.

Slated for completion in 2012, the Saudi project may be the largest ever undertaken in the petrochemical industry. Dow CEO Andrew N. Liveris told analysts in January that the site would become the "Freeport, Texas, of the emerging world," a reference to one of Dow's flagship chemical complexes.

The companies are planning some 30 separate plants, including an ethylene cracker and plants for polyethylene, ethylene oxide and derivatives, propylene oxide, glycol ethers, epoxy resins, polycarbonate, polyurethane, chlorine, and vinyl chloride.

The key to the complex will be "a long-term secure and reliable feedstock position," Liveris says. It will be integrated with Aramco's Ras Tanura refinery, which will supply liquid feedstocks, and Aramco's Ju'aymah natural gas processing plant, which will supply ethane.

The project is part of Liveris' strategy of reducing the cyclicality of Dow's commodity chemicals business. The company recently announced a polystyrene joint venture with Chevron Phillips. It is also developing ethylene crackers in Oman, Libya, and Thailand.

P. J. Juvekar, a chemical analyst with Citigroup, endorses the strategy but with some reservations. "We believe Dow's Middle East strategy has been brilliant so far," he wrote to clients late last month. "But too many such ethylene deals might increase the firm's overall cyclicality."

 
Chemical & Engineering News
ISSN 0009-2347
Copyright © American Chemical Society

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