Construction will begin in 2006, with production anticipated to begin in 2008; the facility's initial production capacity will be about 300,000 metric tons.

The companies said the plant will help meet growing demand for propylene oxide derivatives, particularly in the polyurethanes market.

BASF and Dow in July 2003 launched a collaborative research program focusing on propylene oxide production based on propylene and hydrogen peroxide, which the companies said offers the advantage of eliminating the production of co-products other than water. In addition, they said, production plants using the process require a smaller footprint, less infrastructure and a significantly lower investment compared with conventional PO production processes.