Axiall selects partner for US Gulf Coast ethylene project

Axiall Corp. and South Korean firm Lotte Chemical have entered a 50-50 joint venture for the design, construction, and operation of a proposed 1 million tonne/year ethane cracker to be built in Louisiana.

The joint venture follows Axiall’s Dec. 19, 2013, announcement of its intention to find a partner to build the potential cracker, the company said (OGJ Online, Dec. 20, 2013).

The companies expect to jointly award a front-end engineering design contract for the 1 million-tpy cracker in first-quarter 2014. In addition, Lotte Chemical would begin a FEED study for a wholly owned monoethylene glycol plant to be built next to the planned cracker, the company said.

If the projects are approved by each company’s board, both plants could begin commercial operation in 2018, Axiall said.

“As part of Axiall’s long-term growth strategy, we believe it is important we have further integration with cost-based economics on 50% of our annual ethylene requirements,” said Axiall Pres. and Chief Executive Officer Paul Carrico said.

“Lotte Chemical has a global presence in the chemicals industry, and the fact that it currently operates three crackers with more than 2.8 million tonnes of ethylene capacity worldwide demonstrates that Lotte Chemical would be a strong and experienced partner in this important strategic investment,” Carrico added.

While no new cost estimates were disclosed, Axiall previously estimated a total capital investment of about $3 billion for the project, with Axiall’s portion amounting to around $1 billion (OGJ Online, Dec. 20, 2013).

Formed by a merger of Georgia Gulf Corp. and the commodity chemicals business of PPG Industries in January 2013, Axiall already holds three manufacturing plants in Louisiana, two of which are in the Lake Charles area, with another in Plaquemine.