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Dow Chemical Restarts Louisiana Ethylene Plant

Dow Chemical Co. (DOW), the largest U.S. chemical maker by revenue, restarted an idled ethylene plant after almost four years because natural gas from shale formations has made U.S. production more competitive.

The Olefins 2 plant at St. Charles Operations near Hahnville, Louisiana, began producing ethylene on Dec. 25, Nancy Lamb, a spokeswoman for the Midland, Michigan-based company, said today in an e-mail. The plant was closed in January 2009. Dow had said it would be reopened by Dec. 31.

Chairman and Chief Executive Officer Andrew Liveris is investing $4 billion on the U.S. Gulf Coast to boost ethylene and propylene capacity through 2017 because of cheap gas, used as a raw material and to power plants. Hydraulic fracturing of shale rock formations caused a glut of gas supplies and sent prices to a decade low in April.

The St. Charles plant will add about $150 million a year to earnings before interest, taxes, depreciation and amortization, Liveris said Dec. 3.

Ethylene and propylene are used to make plastics for packaging, autoparts and carpets, among hundreds of uses.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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