Shale Gas Boom Continues Dow to Invest in MEG Plant U.S. Gulf Coast
Dow wants to benefit from shale gas economics in the USA. For this purpose the company will optimize its ownership in its group of Kuwaiti Joint Ventures. This include also a MEG plant on U.S. Gulf Coast.
Midland/USA – Dow intends to restructure its participation in its group of Kuwaiti Joint Ventures with the objective of optimizing its investment and expanding its relationship with Greater Equate on the U.S. Gulf Coast. The reorganisation is expected to occur in two phases. Under the first phase, EQUATE would acquire MEGlobal for a total equity consideration of $3.2 billion. The transaction will result in Dow receiving $1.5 billion in pre-tax proceeds. Following completion of this acquisition, which is expected to close by year-end 2015, Dow will retain a 42.5 percent ownership stake in MEGlobal through its ownership of Greater Equate. This acquisition is also expected to drive efficiencies and cost savings due to existing synergies between MEGlobal and Equate.
In the second phase, Dow and Petrochemical Industries Company (PIC) have agreed that Dow will further reduce its overall ownership interest in Greater Equate. The target to complete this second phase of the transaction is mid-2016. In a related move, MEGlobal will build an monoethylene glycol (MEG) plant on the U.S. Gulf Coast – enabling MEGlobal and its parent companies to enjoy growth in a highly strategic region of the world and drive significant expansion of MEGlobal’s geographic footprint and capacity. Final location of the asset is contingent upon pending incentives.