07-03-2012

Dow’s world-scale propylene production unit investment receives initial board authorization

The Dow Chemical Company announced today that its Board of Directors has  authorized capital to finalize detailed engineering and purchase long  lead-time equipment for a new, world-scale propylene production facility  to be constructed at Dow Texas Operations.

This represents the latest move in the Company’s comprehensive strategy  to increase its ethylene and propylene production and connect its  operations with low-cost feedstock opportunities available from  increasing supplies of U.S. shale gas.

“This authorization marks yet another significant milestone in Dow’s  comprehensive plan to create competitive advantage for our downstream  Performance Materials and Advanced Materials businesses by further  connecting our U.S. operations with cost-advantaged feedstocks,” said  Jim Fitterling, executive vice president of Dow and president of  Feedstocks & Energy and Corporate Development. “This investment directly  supports Dow’s transformational strategy to enhance its feedstock  flexibility and integration strength, and positions the Company for  growth in attractive markets and geographies.”

Basic engineering work for the new on-purpose propylene production  facility at Dow Texas Operations has commenced, and the project is on  track for production start-up in 2015.

In December 2011, Dow and UOP LLC, a Honeywell company, signed a  technology licensing agreement, enabling on-purpose propylene production  at the facility. Under the terms of this agreement, Dow will license  UOP's proprietary UOP C3 Oleflex TM process technology  for manufacturing on-purpose propylene from propane. Dow also signed  catalyst supply and performance guarantee agreements with UOP.

On-purpose propylene production from propane will create better economic  value for Dow compared with high-priced purchased propylene.

“The availability of cost-advantaged feedstocks from U.S. shale gas  developments represents a value-creating opportunity for our downstream  businesses, and Dow is capitalizing on this,” said Brian Ames, vice  president of Olefins, Aromatics and Alternatives. “Our Company was among  the first in our industry to declare a comprehensive plan to take  advantage of the increasing supplies of U.S. natural gas liquids, and we  remain on track to implement that plan, which will create thousands of  domestic jobs.”

The project is expected to create 1,300 jobs at its construction peak.  When taken in context with Dow’s comprehensive USGC investments, the  Company expects to create a total of 40 contractor jobs and 80 new, Dow  direct jobs to operate and maintain the facilities. Further Dow  estimates that this project, together with all other planned projects  announced on April 21, 2011 as part of company’s comprehensive U.S.  investment plan, will create up to 35,000 indirect jobs in the United  States.