Dow Plans Fort Saskatchewan, Alberta, Ethylene Cracker-Derivatives Site
According to company officials, the project would more than triple Dow's ethylene and polyethylene capacity from its Fort Saskatchewan site, while retrofitting the site's existing assets to net-zero carbon emissions. The production process will convert cracker off-gas into hydrogen as a clean fuel to be used in the production process, and carbon dioxide that would be captured onsite to be transported and stored by adjacent third-party CO2 infrastructure.
"This investment builds on Dow's strong leadership position and allows us to meet the increasing needs of customers and brand owners seeking to lower the carbon footprint of their products," said Dow Chairman and CEO Jim Fitterling. "Our advantaged position and disciplined approach to capital investment makes us well positioned to lead the industry in decarbonizing, growing and accelerating Dow's path toward carbon neutrality."
The organic, brownfield investment would significantly increase Dow's capacity of advantaged ethylene, polyethylene and derivatives manufactured across Alberta, all while maintaining Dow's enterprise-level commitment to keep capital expenditures at or below depreciation and amortization (D&A) levels, Dow officials said. Dow selected the site as the region offers a highly competitive energy and feedstocks position as well as access to available third-party CO2 infrastructure.
"Alberta's support for circular hydrogen and CO2 infrastructure are essential to enabling us to develop this net-zero carbon emissions manufacturing facility," added Fitterling. "Canada's support for this type of investment can serve as a model for how government investment can encourage the development and accelerate adoption of emissions-avoiding technologies and solutions."
The investment, which is subject to approval by Dow's Board of Directors and various regulatory agencies, would decarbonize approximately 20 percent of Dow's global ethylene capacity while growing polyethylene supply by about 15 percent and supporting approximately $1 billion of EBITDA growth across the value chain by 2030. Further, Dow estimates that the project can be completed with an approximately 15 percent lower capital intensity than Dow's industry-leading Texas-9 cracker and derivative units.
"Today's announcement from Dow is fantastic news for Alberta's economy. If this project proceeds, it could represent one of the largest job-creating investments in Alberta in over a decade," said Jason Kenney, Premier of Alberta. "By choosing Alberta to host the world's first net-zero carbon emissions ethylene plant, Dow is highlighting our growing global leadership in emissions-reducing technology like carbon capture utilization and storage, and Alberta's open for business policies."
The project would build on Dow's previous success in reducing the carbon emissions intensity of its manufacturing fleet. Texas-9 in Freeport, Texas, Dow's most recently commissioned cracker, has delivered a greater than 15 percent return on invested capital since startup and currently operates at 65 percent lower conversion cost and up to 60 percent lower carbon dioxide emissions intensity than the average cracker in Dow's fleet as well as 20 percent lower capital cost versus the industry. The asset leverages best-in-class technology, including a highly efficient furnace design with optimized integration with other facilities on site, that significantly reduces energy consumption and carbon dioxide emissions.
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