2 weeks Ago By Zac Delaney
Dow Inc. delayed the construction of its Path2Zero project in Fort Saskatchewan to reduce spending while trying to manage a downcycle in the market. In its quarterly earnings report released Thursday, Dow announced that it would be cutting its spending to help ride out a downturn in the market.
Part of its spending cuts include an expanded review of its European assets (primarily in polyurethanes), and a pause in construction of its Path2Zero project in Alberta’s Industrial Heartland in Fort Saskatchewan, northeast of Edmonton. Although it has put a pause on construction, Dow says it remains committed to its Path2Zero project “and the growth upside it will enable.” The announcement comes amid broad market volatility, fuelled by tariffs being imposed by U.
S. President Donald Trump. This year to date, Dow shares were down over 9.
6 points (more than 24 per cent), reaching a low of US$25.81 on April 8 — the same week Trump’s tariffs cratered markets around the world. “Markets worldwide are awaiting additional clarity into how the tariff and global trade negotiations will land.
In the meantime, we remain focused on managing a disciplined and balanced capital allocation approach over the cycle,” said Dow chairman and CEO Jim Fitterling. The decision knocks $1 billion off of Dow’s original enterprise capital spending to $2.5 billion from $3.
5 billion. The Path2Zero project scope is significant, aiming to become the world’s first net-zero ethylene cracking facility. Once complete, Dow said it would decarbonize 20 per cent of its global ethylene capacity, while increasing its polyethylene supply by roughly 15 per cent.
In all, it’s expected to produce and supply about 3.2 million metric tons of certified low- or zero-carbon emissions for polyethylene and ethylene derivates for Dow’s customers and partners around the world — all of which is a boon for the company. Perhaps more important in the short term to the region, however, is the estimated 4,500 to 5,500 jobs the project will create during peak construction and the 400-500 full-time jobs once operational.
Dow didn’t say in the report when it might resume construction on the project. Energy and Minerals Minister Brian Jean was not available for an interview on the announcement, but his office said it is encouraged that the area is still a priority for Dow. “ We are encouraged to hear that Dow continues to see this as a key corporate priority and that construction work remains ongoing, even if they are slowing down construction at the Path2Zero growth project in 2025,” said the minister’s office.
In addition, the minister’s office also underscored the importance of the Path2Zero project for the province. “ This project is very important for Alberta and our economy, and for proving that Alberta is the best place in the world to build low emissions energy and petrochemical projects.” Dow’s decision on the Fort Saskatchewan project comes alongside other cost-saving measures being taken by the company to reduce spending.
Besides the Path2Zero delay and extended review of its European assets, Dow also sold a minority stake in select Gulf Coast infrastructure that is anticipated to close in May, and is expected by the company to generate proceeds of up to $3 billion. It’s also expecting more than $1 billion from Nova Chemicals Corp., based in Alberta, following a 2019 court ruling by the Court of Queen’s Bench of Alberta for damages incurred in 2012.
In all, Dow said its actions aim to deliver roughly $6 billion in “near-term cash support” that will enable the company to ride out the ongoing economic and geopolitical uncertainty. RelatedDow delays construction at major Alberta project amid volatilityDow's Alberta petrochemical megaproject to get billions in government support Bookmark our website and support our journalism: Don’t miss the news you need to know — add EdmontonJournal.com and EdmontonSun.
com to your bookmarks and sign up for our newsletters here. You can also support our journalism by becoming a digital subscriber. Subscribers gain unlimited access to The Edmonton Journal, Edmonton Sun, National Post and 13 other Canadian news sites.
Support us by subscribing today: The Edmonton Journal | The Edmonton Sun..
