New production will benefit from long-term ethylene supply agreement with Dow
MEGlobal, a wholly-owned subsidiary of EQUATE Petrochemical Company, plans to construct a new world-scale monoethylene glycol (MEG) manufacturing facility at Dow’s Oyster Creek site in Freeport, Texas. The new Oyster Creek MEG facility will be owned by MEGlobal and is the Company’s first manufacturing unit in the United States. The new MEGlobal plant will create 1,400 construction jobs at the project’s peak, and the Company will employ approximately 50 new workers when it goes on stream in mid-2019.
“The Oyster Creek site provides MEGlobal with greater flexibility to satisfy our customers’ needs for consistent and reliable delivery of ethylene glycol products, especially in the growing U.S. and Asian markets,” said Ramesh Ramachandran, president, MEGlobal International FZE.
Additionally, the new site will benefit through a long-term ethylene supply agreement with Dow from its new ethylene cracker.
“Establishing MEG production in the U.S. Gulf Coast is an important investment for us as it greatly enhances our global footprint and is directly aligned to our growth strategy to maximize value as a leading ethylene glycol producer and supplier,” said Mohammad Husain, president and chief executive officer, EQUATE Petrochemical Company, an international joint venture between Petrochemical Industries Company (PIC), The Dow Chemical Company (Dow), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC). “Additionally, ethylene producer economics through a long-term supply agreement with Dow provide a unique competitiveness for the production plant.”
PIC Chief Executive Officer Mohammed Abdullatif Al-Farhoud said, “The MEGlobal investment in the U.S. Gulf Coast fits the diversification and growth strategy of PIC. We continue to look for opportunities in the petrochemical area across the globe to expand our footprint and diversify our portfolio. We are very pleased that our U.S. Gulf Coast investment strategy is moving towards implementation.”
Leveraging Advantages of U.S. Gulf Coast
Dow’s new ethylene cracker is part of the existing infrastructure that makes the Dow Texas Operations attractive for locating the new MEG plant on the U.S. Gulf Coast. Construction continues to progress on the site, with the cracker more than 40 percent complete and on track for start-up in the second quarter of 2017. Dow will also complete ethane feedstock flexibility for an ethylene cracker at the Company’s Louisiana Operations site, on track for start-up in the second half of 2016. These projects will complement previous milestones of Dow’s completed investments in the U.S. Gulf Coast including the restart of an ethylene cracker at the Company’s St. Charles Operations site in 2012 and the world-scale propane dehydrogenation unit (PDH) that began commercial operations in December 2015.
“This announcement is in line with Dow’s strategy to integrate with cost-advantaged production that will ultimately enable growth in attractive markets across North and South America,” said Brian Ames, Dow’s senior vice president of Portfolio Development for Feedstocks and Performance Plastics. “With decades of operability in mind, Dow continues to track aggressive timelines and harness our first-mover advantage in the region, resulting in positive economic benefits even in a low-oil environment.”
The recent approval of the 312 and 313 tax agreements on the MEGlobal project will allow MEGlobal to invest in Texas, and will help maintain a favorable climate in the state for future business approval and development by Dow and MEGlobal.
MEG is used in a number of market applications, including polyester fibers, polyethylene terephthalate (PET) bottles and packaging, antifreeze and coolants, paints, resins, deicing fluids, heat transfer fluids and construction materials.
