Petrochemical giant Dow will spend $6.5-billion to build what it says will be the world’s first net-zero ethylene and derivatives complex at its Fort Saskatchewan, Alberta, site, the firm said Nov. 28 in making the final investment decision. 

Dow said the PATH2ZERO project, including a new ethylene cracker and expanded polyethylene production, will decarbonize 20% of its global capacity. The first phase will add about 1.29 million tons per year of ethylene and polyethylene capacity. The second phase, to start in 2029, will add 600,000 tpy. 

Construction will begin in 2024, with first-phase startup in 2027. 

To achieve net-zero Scope 1 and 2 emissions, Dow said the project will use technology from global industrial gas firm Linde to convert cracker off-gas to hydrogen, which will be used as a clean fuel to supply site furnaces. In addition, carbon dioxide emissions will be captured and stored.

The project also includes an added $2 billion for hydrogen, CO2 capture and other infrastructure invesetment by third parties, Dow said.

Under a framework agreement, Linde will complete design and engineering for a company-owned and operated world-scale air separation and autothermal reformer complex that would be integrated with its existing site operations, Dow said.

Dow said Fluor Corp. is managing front-end engineering and design of its complex and was also set to provide integrated project management services, as well as engineer-procure-construct-management services for the ethane cracker and associated utilities, power and infrastructure.

The contractor announced Dec. 4 that its construction contracts are valued at about $3 billion.

The project also would qualify for about $1.5 billion in federal, province and local government subsidies, said a Dow spokeswoman, with prevailing wage mandates. About 28 project labor agreements have been signed, she said. 

Investment and Return

Dow said the investment will create up to 8,000 construction jobs at peak and up to 500 permanent plant jobs. 

Dow has maintained the Fort Saskatchewan site since 1961 because of highly cost-competitive natural gas and ethane, a critical feedstock for ethylene production. The region also has access to existing CO2 transportation and storage infrastructure.

The company said the added capacity will expand growth in "high-value markets" such as packaging, infrastructure and hygiene products, with enable commercialization of low and zero-emissions products. 

"Canada's feedstock advantage provides Dow with lower cash costs compared to the rest of the world, even more advantage than the US Gulf," CEO Jim Fitterling told attendees at an energy conference. 

Dow says by 2030 it will have reduced its net annual carbon emissions by 5 million metric tons versus its 2020 baseline, what is said was a 15% reduction. The firm intends to be carbon neutral by 2050.