DowDuPont Opens Massive Plastics Plant in Freeport

The newly merged DowDuPont said Thursday it has started up its new ethylene and plastics plants in Freeport, making the nation's largest chemical giant the first to debut a major ethylene project along the Texas Gulf Coast.

The complex is the crown jewel of the old Dow Chemical's recent $6 billion expansion along the Gulf Coast. Dow and DuPont completed their merger Sept. 1, with plans to later split into three companies. After that split in a year or so, the company that will own the Freeport complex will revert to the Dow name.

The Freeport project includes a massive ethane cracker to separate a component of natural gas liquids called ethane, which in turn will provide the feedstock for ethylene, a building block of most plastics. The new plant will produce some 1.5 million metric tons a year, with plans to increase that capacity to 2 million metric tons a year, which would make it the world's largest ethylene production plant.

"These facilities are an integral part of Dow's investments on the U.S. Gulf Coast to meet increasing consumer-led demand," Andrew Liveris, DowDuPont's executive chairman, said in a statement.

The ethane facility is near DowDuPont's polyethylene plastics plant that will use ethylene and start to churn out 400,000 metric tons of plastic resins a year to make films and packaging materials. DowDuPont is building additional plastics facilities in Freeport and Louisiana.

DowDuPont is among several companies that are betting on increasing global demand for plastics, driven by China and other rapidly growing nations in Asia. Those bets are financing a petrochemical boom along the Gulf Coast, where chemical and plastic makers can take advantage of cheap and abundant natural gas flowing from the Texas shale fields.

Chevron Phillips Chemical Co. and Exxon Mobil Corp. are both completing massive ethane processing plants in the Baytown area right now. Exxon Mobil's project was slated for completion by the end of this year, while Chevron Phillips said this week that Hurricane Harvey's floodwaters are delaying its plant opening until early 2018.

Houston's Occidental Petroleum Corp. and the Mexican chemical maker Mexichem opened a smaller ethane processing plant earlier this year outside Corpus Christi.

The startup of its Freeport plants give Dow a head start. The company expects to reach operating capacity before the end of this year.

"As we ramp these units to full production, we continue to solidify our early mover advantage," said Jim Fitterling, chief operating officer for DowDuPont materials science. "