US-based Dow Chemical Co. (DOW) plans to start its US$ 1.5 billion olefins complex in Malaysia on schedule in early December, despite delays in commissioning the complex“s cracker, a company executiv…
US-based Dow Chemical Co. (DOW) plans to start its US$ 1.5 billion olefins complex in Malaysia on schedule in early December, despite delays in commissioning the complex“s cracker, a company executive said. The company“s first cracker in Malaysia will produce ethylene and propylene, with an annual capacity of 600,000 tons and 90,000 tons, respectively, Garrie Li, Dow Pacific“s commercial director for hydrocarbon & energy Asia Pacific, told Dow Jones Newswires in a recent interview. Full operations at the cracker were delayed from early August. The ethylene and propylene will be used as feedstock for downstream products, including 385,000 tons a year of ethylene oxide, 365,000 tons/year of ethylene glycol, and 140,000 tons of butanol. Optimal Olefins, which owns the cracker, is 64% held by Malaysia“s state-owned Petroliam Nasional Bhd., or Petronas, 24% by Dow Chemical through its Union Carbide Corp. unit, and 12% by Sasol Ltd. of South Africa. Both Petronas and Dow hold stakes in the joint ventures that operate the downstream plants. The petrochemical project in Malaysia will help boost the company“s revenue in Asia Pacific, said Li. He did not give any sales projections for next year, but did acknowledge that an economic downturn would lead to slower petrochemical demand worldwide. According to David Stotter, a senior consultant at Chem Systems East Asia Ltd., the economic repercussions from the Sept. 11 terrorist attacks in the US have shaken demand, which will now take longer to catch up with supply. Before the attacks, Chem Systems had forecast that the global oversupply of petrochemical products would narrow in 2004. “Despite the difficult time ahead, we continue to look for investment opportunities (in the petrochemical field),” Li said. “Asia Pacific is the faster growing market for petrochemicals. We still want to invest in the region,” he added. Chemical Market Associates Inc. has forecast growth in Asian ethylene demand of 4.5% a year from 2000 to 2010. Dow Chemical also plans to start construction of its US$ 2-3 billion cracker project in China as soon as the company gets approval from the Chinese government. The cracker in China, which is expected to be operational in 2008, will produce 600,000 tons a year of ethylene and 300,000 tons/year of polyethylene. In Thailand, the company“s olefin plant Rayong Olefin, a joint venture between Dow Chemical and industrial conglomerate Siam Cement PCL, boosted ethylene production in August to 800,000 tons from 600,000 tons a year.