Dow Inc. DOW recently said that it has chosen Linde as its industrial gas partner for the supply of clean hydrogen and nitrogen for the former’s proposed net-zero carbon emissions integrated ethylene and derivatives complex in Fort Saskatchewan, Alberta, Canada.
Final investment decisions for both the Dow and Linde projects are expected in the fourth quarter of 2023 and are subject to the approval of the respective boards of the companies and various regulatory agencies. The potential startup of phase 1 in expected in 2027. The production process at Fort Saskatchewan will convert cracker off-gas into hydrogen as a clean fuel, which will be utilized in the ethylene production process.
Under the agreement, Linde will complete the design and engineering for a world-scale air separation and autothermal reformer complex owned and operated by the company. The complex will be integrated with its existing Fort Saskatchewan operations.
Dow, which is among the prominent players in the chemical space along with Eastman Chemical Company EMN, PPG Industries, Inc. PPG and Celanese Corporation CE, said that the ethylene cracker and derivatives complex will decarbonize roughly 20% of its global ethylene capacity while increasing its global polyethylene supply by around 15%. It is also expected to support around $1 billion of EBITDA growth across the value chain by 2030.
Dow topped earnings and revenue estimates in the first quarter of 2023. However, the company’s revenues declined roughly 22% year over year in the quarter as it saw lower sales across its segments in the quarter due to weaker macroeconomic activity globally. The top line was hurt by lower local pricing, reduced volumes and unfavorable currency translation. Dow witnessed lower demand in industrial, consumer durables, and building and construction applications.
The company said that its disciplined execution has enhanced its ability to navigate the impact of higher inflation on consumer demand and weak global economic activity through the balance of 2023. It expects continued benefits of its operational and cost actions as it progresses through the year.
Dow is making progress with its actions to deliver $1 billion in cost savings in 2023. Moreover, DOW is benefiting from its advantaged feedstock positions. It expects oil and gas spreads to further support its strategic cost-advantaged positions.
Another prominent chemical maker, Eastman Chemical recently delivered forecast-topping earnings performance in the first quarter. EMN’s adjusted earnings per share (EPS) of $1.63 surpassed the Zacks Consensus Estimate of $1.22. The company expects adjusted EPS for full-year 2023 to grow between 5% and 15%.
PPG Industries’ first-quarter adjusted EPS of $1.82 also beat the Zacks Consensus Estimate of $1.55, aided by pricing growth across segments, improved manufacturing efficiencies and overall cost discipline. PPG projects adjusted EPS of $6.95-$7.25 for 2023.
Celanese is slated to report first-quarter earnings on May 9. CE, in its fourth-quarter call, said that it sees adjusted EPS of $1.50-$1.75 for the first quarter of 2023.
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