MRC -- Dow announced that its board of directors has declared Final Investment Decision on the Company's Fort Saskatchewan Path2Zero investment to build the world's first net-zero Scope 1 and 2 emissions integrated ethylene cracker and derivatives facility in Alberta, Canada, said Reuters.
The $6.5 billion project, excluding governmental incentives and subsidies, includes building a new ethylene cracker and increasing polyethylene capacity by 2 million MTA as well as retrofitting the site's existing cracker to net-zero Scope 1 and 2 emissions. The investment is expected to deliver $1 billion of EBITDA growth per year at full run rates over the economic cycle while decarbonizing 20% of Dow's global ethylene capacity.
This new capacity will enable Dow to capture growing customer demand in high-value markets, such as packaging, infrastructure and hygiene, among others, with potential additional value captured from commercializing low and zero-emissions products. The project builds on Dow's expertise in successfully implementing large projects, such as its TX-9 cracker in Freeport, Texas, which has delivered more than 15% return on invested capital since its 2017 start-up through best-in-class capital intensity, conversion cost, and low emissions intensity.
The board's approval enables the Company to begin construction in 2024. Capacity additions are expected to come online in phases, with the first phase starting up in 2027, adding approximately 1,285 KTA of ethylene and polyethylene capacity, and the second phase starting up in 2029, adding an additional approximately 600 KTA of capacity.
We remind, Dow could make a final investment decision (FID) on its net zero carbon emissions cracker project at Fort Saskatchewan in Canada’s Alberta province as soon as October. The company announced the Canadian project in October 2021, and in March officials indicated a FID by end 2023.