Dow Chemical prefers LPG over US ethane as feed for European crackers
11/14/2014 12:00:00 AM
Dow Chemical is not pursuing US exports of shale-derived ethane for its European ethylene crackers, instead focusing on enhancing liquefied petroleum gas (LPG) infrastructure.
"In our view, ethane to Europe does not make economic sense," said Jim Fitterling, Dow's executive vice president. He spoke to reporters at the company's investor day in Lake Jackson, Texas.
Dow is already moving LPG from the US to Europe for use in its crackers, the company said.
“According to our math, people should be doing LPG cracking in Europe, versus going to ethane and building large ethane carriers,” said Dow CEO Andrew Liveris.
Dow has already invested in expanding its LPG cracking capacity at its Tarragona complex in Spain, it said. The company can also crack LPG at its Terneuzen plant in the Netherlands.
Fitterling said more announcements would be made in 2015 in regards to expanding its European LPG infrastructure.
“When we look at it, it doesn’t make sense for us to [export ethane]," said Fitterling. "Once you land ethane into Europe, the spread that you’re playing with is very thin compared to LPG."
Fitterling says that European LPG margins have grown by five times over the past four years.
Dow's choice to not pursue US ethane for its European operations is in contrast to companies including SABIC, Borealis and INEOS.
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