Dow Chemical says it will increase ethane cracking capability on the U.S. Gulf Coast by 20%- 30% over the next two to three years, and is reviewing joint venture options for building a natural gas liquids (NGL) fractionator to secure ethane supplies. Both actions are intended to capitalize on the current favorable supply dynamics in North America, Dow says. Additional fractionation capacity provides a new source of NGL supplies, helping to position U.S. petrochemical companies as one of the lowest cost producers of ethylene globally. Capital costs and possible locations for the fractionator were not disclosed. However, a fractionator located on the U.S. Gulf Coast would be beneficial to Dow in order to link to the company’s main production sites in Texas and Louisiana. The company says it plans to use its well-developed infrastructureto participate with producers in fractionation, transportation and storage of NGLs. “Bringing additional fractionation capacity online and expanding our ethane cracking capabilities will further improve Dow’s feedstock flexibility and competitive positions in the U.S.,” says Raja Zeidan, global business v.p. for Dow Hydrocarbons. “Ethane is an advantaged feedstock in the United States and we anticipate a favorableoil to gas ratio to continue.” About 55% of the company’s ethylene is produced from ethane. Increasing ethane capability will boost Dow’s competitive cost position for its higher-margin specialty plastics business,as well as its downstream performance businesses. The news comes on the heels of Enterprise Products Partner’s announcement that it has started operations at its 75,000-bpd NGL fractionator at Mont Belvieu, TX. It is the company’s fourth NGL fractionator at the site and will provide much-needed capacity to accommodate growing NGL volumes from some of the nation’s most active producing areas, includingthe Barnett Shale in North Texas and the Rockies, Enterprise says.
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