Dow Chemical Says it Will Begin Production at Canadian Polyethylene Expansion Project in 2029

Dow Chemical on Thursday said it expects to begin production in late 2029 from the first phase of its Path2Zero ethylene and polyethylene expansion project in Fort Saskatchewan, Canada.

The two-year delay supports Dow’s near-term cash flow and assures that the timing of the work will better align with a market recovery, Chief Executive Jim Fitterling said in a call to discuss the company’s fourth-quarter financial results.

“We remain committed to the strategic rationale of the project and the upside it will enable in targeted applications like pressure pipe, wiring cable, and food packaging,” he added.

The first phase of the project, which was scheduled to start in 2027, will add about 1,285,000 metric tons of annual ethylene and PE capacity and the second phase will add about 600,000 mt/year.

The second phase is now scheduled to begin operations in late 2030.

The project involves building a new cracker and retrofitting the existing cracker to have net-zero Scope 1 and 2 emissions, decarbonizing 20% of Dow’s global ethylene capacity.

For the near term, CFO Jeff Tate said he expected margin expansion and seasonal demand uplift to drive a Q1 Ebitda forecast of $750 million. Tate said the Q1 results will take an estimated $125 million hit from planned maintenance at a cracker in St. Charles, La. A joint venture cracker turnaround at Dow’s joint ventures in Kuwait will also weigh on Q1 earnings.

Chief Operating Officer Karen Carter said PE demand “remains resilient” and is rising faster than GDP.

Dow in November reported record PE sales in domestic and export markets, Carter added.

“Exports out of the low-cost regions in North America continue to be strong, and so [we] absolutely expect coming into the first quarter that integrated margins will improve,” she said.

Fitterling said strong natural gas demand from AI data centers and LNG exports are a positive development for Dow because it will lead to increased natural gas and NGL production.

“We see about 8% growth in the fractionation capacity coming at the end of 2026 and into 2027. So I think there’s going to be plenty of ability to take that ethane out, and we’ll have pretty good NGL prices through there,” he said.

Reporting by David Barry, dbarry@opisnet.com; Editing by Jeffrey Barber, jbarber@opisnet.com