Dow moving ahead with $6.5 billion net-zero ethylene, polyethylene project in Canada

Global petrochemical giant Dow will move ahead with constructing a $6.5 billion net-zero ethylene cracker and polyethylene complex at its Fort Saskatchewan, Alberta, site, the company said Nov. 28.

The project will decarbonize 20% of Dow's global ethylene capacity, the company said.

Construction will begin in 2024, with the first phase expected to start in 2027, adding about 1.285 million mt/year of ethylene and PE capacity. The second phase will start in 2029, adding an additional 600,000 mt/year of capacity. The $6.5 billion project, excluding governmental incentives and subsidies, includes the new cracker and polyethylene capacity increased by 2 million mt/year, the company said. The project also includes an additional $2 billion of investment from third parties for circular hydrogen, CO2 capture and other infrastructure assets.

"Canada's feedstock advantage provides Dow with lower cash costs compared to the rest of the world, even more advantage than the US Gulf," CEO Jim Fitterling said Nov. 28 at an energy conference. "In addition, the region has ample existing cost advantaged ethane supply to support our project."

Linde will build a world-scale air separation and autothermal reformer complex at the site to convert cracker off-gas to hydrogen, which will be used as a clean fuel to supply the cracker furnaces. In addition, CO2 emissions will be captured and stored, reducing existing emissions by about 1 million tons per year of CO2 equivalent while abating all emissions from the addition of the site's new capacity. Dow will also retrofit the existing cracker at Fort Saskatchewan to net-zero Scope 1 and 2 emissions.

US spot ethylene prices were last assessed Nov. 27 at 19.5 cents/lb, down 6% from Nov. 26, Platts data showed.