Dow places a bet on natural gas, invests $4B in new Freeport facilities

Houston Business Journal by Molly Ryan, Reporter Date: Thursday, April 19, 2012, 2:45pm CDT

The Dow Chemical Co. (NYSE: DOW) is banking on natural gas prices remaining low.

The Michigan-based chemical company needs affordable natural gas to process ethylene and propylene in its new production facilities in Freeport, Texas.

The company made public Thursday plans to build an ethylene cracker at its Gulf Coast facility in Freeport. Although Dow first announced plans to build a new cracker and a new propylene production facility last year, the company did not release the whereabouts of the largest element of the facilities — the ethane cracker — until this week.

Dow chose the Gulf Coast for its new production facilities, which will cost around $4 billion, because of its proximity to natural gas resources, mainly shale gas resources throughout Texas, said Brian Ames, Dow’s global vice president for olefins, aromatics and alternatives.

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