Axiall, Lotte finalize $3-billion investment for US petrochemical plants

Axiall Corp., Atlanta, and South Korea’s Lotte Chemical Corp., Seoul, have reached a final investment decision (FID) to proceed with plans to build a 1 million tonne/year ethane-based cracker and associated monoethylene glycol (MEG) plant in Lake Charles, La. (OGJ Online, June 18, 2015; Feb. 11, 2014; Dec. 20, 2013).

LACC LLC, a subsidiary of Axiall and Lotte Chemical USA Corp.’s 50–50 joint venture Eagle US 2 LLC, will invest $1.9 billion to build the steam cracker adjacent to Axiall’s Lake Charles chlor-alkali manufacturing plants to take advantage of existing infrastructure, competitive US shale feedstock resources, and ethylene distribution infrastructure, according to a series of releases from the JV and Louisiana Economic Development (LED).

Adjacent to the new steam cracker, Lotte separately will invest an additional $1.1 billion to build and operate the US’ largest MEG plant, from which 600,000 tpy of MEG will be exported to customers in Europe and Asia, according to Soo Young Huh, Lotte Chemical’s president and chief executive.

To secure the combined projects, the state of Louisiana offered the companies a competitive incentive package that includes a $4.55-million modernization tax credit for the ethane cracker, as well as economic development award program incentives of $700,000 for the cracker and $1.47 million for the MEG plant, which will pay for site infrastructure improvements, LED said.

With site preparation already under way and full construction due to begin during second-quarter 2016, the grassroots cracker and MEG plant are scheduled for startup in early 2019.

LACC also confirmed it has let an additional contract to CB&I, Houston, to provide engineering, procurement, fabrication, and construction (EPC) for the ethane cracker, which will use the service company’s proprietary highly selective SRT cracking heaters as well as its recovery section design.

CB&I's scope of work under the $1.3 billion EPC contract also includes supply of spheres and fabricated pipe spools.

LACC previously let a contract to CB&I to deliver detailed engineering and early procurement services for the project following the service provider’s previous delivery of front-end engineering and design and other early-stage engineering works for the cracker (OGJ Online, Sept. 3, 2015).

In October, Lotte Chemical awarded CB&I a contract to execute preliminary services related to construction of its associated MEG plant (OGJ Online, Oct. 30, 2015).

Contact Robert Brelsford at [email protected].