Dow Chemical Forming Joint Ventures With Chinese, Saudi Arabian Energy Companies

Dow and Shenhua Group planning a coal-to-chemicals complex in China; Dow and Saudi Aramco building a chemicals and plastics production facility in Saudi Arabia.

MIDLAND, Mich.- Dow Chemical Co. announced Monday the signing of an agreement with China’s Shenhua Group to study the feasibility of building a world-scale coal-to-chemicals complex in Shaanxi Province in China.

The project will use “clean coal” technologies that convert coal to methanol to produce ethylene and propylene, the building blocks to make various plastics and chemical products. The feasibility study is expected to take two years.

Dow also announced the forming of a joint venture with Saudi Aramco, an energy supplier, to build and operate a world-scale chemicals and plastics production complex, the Ras Tanura Integrated Project, in Saudi Arabia.
The Ras Tanura petrochemical joint venture will be operationally integrated with Saudi Aramco’s Ras Tanura Refinery complex and its Ju’aymah gas processing plant, which will supply feedstock to the joint venture and continue to be owned and operated by Saudi Aramco.

The petrochemical complex will produce a broad range of both basic and performance products, including ethylene, propylene, aromatic and chlorine derivatives. Initially, the project scope includes world-scale production units for polyethylene, ethylene oxide and glycol, propylene oxide and glycol, chlor-alkali, vinyl chloride monomer, polyurethane components, epoxy resins, polycarbonate, amines and glycol ethers.

The Shaanxi complex will include a chlor-alkali unit, enabling the production of products such as caustic soda, vinyl chloride monomer and chlorinated organics. Other derivative products being planned for the complex include glycols, amines, solvents, surfactants, acrylic acid and derivatives and propylene derivatives.

Shenhua is the sole large-scale energy company in China, with integrated businesses ranging from coal, power, railway, port to coal liquefaction. By the year 2010, Shenhua’s coal production, installed capacity of the power plants, transportation capacity, port handling capacity, coal liquids & chemicals production is expected to reach 300 million tons, 30,000 MW, 200 million tons, 140 million tons and 4 million tons respectively.

Saudi Aramco manages proven reserves of over 260 billion barrels of oil, and manages the fourth-largest gas reserves in the world. It is headquartered in Saudi Arabia’s Eastern Province city of Dhahran.

Dow, a diversified chemical company, has annual sales of $49 billion and employs 43,000 people worldwide.
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