Dow Inc. (NYSE:DOW) recently announced the selection of Linde as its industrial gas partner for the delivery of clean hydrogen and nitrogen for the latter’s projected 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, subject to approval by the companies’ respective boards of directors and relevant regulatory bodies. The probable start of phase 1 is scheduled for 2027. The Fort Saskatchewan process will transform cracker off-gas into hydrogen, a clean fuel that will be used in the ethylene production process.

Linde will complete the design and engineering for a world-scale air separation and auto thermal reformer complex owned and operated by the business under the terms of the agreement. The complex will be connected with the company’s current Fort Saskatchewan activities.

Dow, along with Eastman Chemical Company (NYSE:EMN), PPG Industries, Inc. (NYSE:PPG), and Celanese Corporation (NYSE:CE), announced that the ethylene cracker and derivatives complex will decarbonize approximately 20% of its global ethylene capacity while increasing its global polyethylene supply by approximately 15%. It is also estimated to drive EBITDA growth of roughly $1 billion across the value chain by 2030.

Dow Beat Estimates in Q1

In the first quarter of 2023, Dow exceeded earnings and revenue expectations. However, the company’s revenues fell roughly 22% year on year in the quarter due to lower sales across all segments due to weaker global macroeconomic activity. weaker local pricing, weaker volumes, and adverse currency translation all harmed the bottom line. Dow saw a drop in demand for industrial, consumer durables, and building and construction products.

According to the company, its focused execution has improved its capacity to navigate the impact of increasing inflation on consumer demand and poor global economic activity to the end of 2023. It anticipates that the benefits of its operational and cost-cutting efforts will continue to accrue as the year continues.

Dow is making headway toward its goal of saving $1 billion in costs by 2023. Furthermore, DOW benefits from its advantageous feedstock positions. It anticipates that oil and gas spreads will support its strategic cost-advantaged positions even further.

Other Companies in the Chemical Sector

Eastman Chemical, another large chemical manufacturer, recently produced earnings that were above expectations in the first quarter. EMN’s adjusted EPS of $1.63 above the Consensus Estimate of $1.22. The company anticipates that adjusted EPS would increase by 5% to 15% in 2023.

PPG Industries’ adjusted EPS of $1.82 also exceeded the Consensus Estimate of $1.55, thanks to pricing growth across segments, better manufacturing efficiencies, and overall cost control. PPG anticipates adjusted earnings per share of $6.95-$7.25 in 2023.

On May 9, Celanese will report first-quarter profits. CE stated in its fourth-quarter earnings call that it expects adjusted EPS of $1.50-$1.75 in the first quarter of 2023.

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