MEGlobal to build new MEG plant by 2019 at Dow Chemical’s Texas hub

MEGlobal, a wholly-owned subsidiary of EQUATE Petrochemical Co., 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 US. 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 US and Asian markets,” said Ramesh Ramachandran, president of 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 US 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 CEO of EQUATE Petrochemical Co., an international joint venture between Petrochemical Industries Co. (PIC), Dow Chemical, Boubyan Petrochemical Co. (BPC) and Qurain Petrochemical Industries Co. (QPIC). 

“Additionally, ethylene producer economics through a long-term supply agreement with Dow provide a unique competitiveness for the production plant," he added.

“The MEGlobal investment in the US Gulf Coast fits the diversification and growth strategy of PIC," said Mohammed Abdullatif Al-Farhoud, CEO 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 US Gulf Coast investment strategy is moving towards implementation.”

Dow’s new ethylene cracker is part of the existing infrastructure that makes the Dow site attractive for locating the new MEG plant, according to project officials. Construction continues to progress on the site, with the cracker more than 40% 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 site in Louisiana, on track for start-up in the second half of 2016. These projects will complement previous milestones of Dow’s completed investments in the US Gulf Coast, including the restart of an ethylene cracker at the company’s St. Charles site in Louisiana 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, according to project officials.

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.