Thai operator plans revamp, restart of idled Louisiana ethylene cracker

Indorama Ventures Olefins LLC (IVO), a subsidiary of Thailand’s Indorama Ventures Public Co. Ltd. (IVL), Bangkok, has entered an agreement to buy, renovate, and restart a dormant ethane cracker in Carlyss, La., just west of Lake Charles in Calcasieu Parish.

To be jointly owned by IVL (76%) and Singapore-based Indorama Corp. (24%), the refurbished cracker will process both ethane and propane feedstock to produce about 370,000 tonnes/year (tpy) of ethylene and 30,000 tpy of propylene, IVL said.

IVO will serve as operator of the revamped ethylene plant, which IVL has committed a capital investment of $175 million to complete, according to the Louisiana Economic Development (LED).

In an effort to secure the project, Louisiana offered IVL a competitive incentive package to offset infrastructure costs that includes a $1.5-million performance-based grant, LED said.

Alongside complementing IVL’s core strategy of further integrating its onshore international polyester operations, the company’s decision to acquire the mothballed cracker results largely from its Louisiana location, which provides access to cost-advantaged ethane and propane feedstock, said Aloke Lohia, IVL’s chief executive officer.

IVL current operates intermediate petrochemical manufacturing sites in Texas, Alabama, Georgia, North Carolina, and South Carolina, LED said.

With its target to begin commercial operations at the Lake Charles plant before yearend 2017, IVL plans to become the first Thai company to take advantage of the US shale gas revolution ahead of proposed greenfield cracker projects, according to Lohia.

Local competition

In Louisiana alone, a few grassroots ethylene cracker projects are under way, with others in under development.

Most recently, Formosa Petrochemical Corp. (FPC), a member of Taiwan’s Formosa Group, announced it is considering plans to build a $9.4-billion ethane cracking and petrochemical complex along the west bank of the Mississippi River in St. James Parish (OGJ Online, Sept. 4, 2015).

To be developed in two phases, the complex also would include downstream plants for production of polyethylene as well as customized outputs of low and high-density polyethylene, ethylene glycol, polypropylene, and other derivatives.

Should FPC proceed with the project, construction and development on Phase 1 would begin next year and wrap in 2022.

FPC is scheduled to take final investment decision on the proposed project by mid-2016.

Earlier this year, Shintech Inc., the US subsidiary of Shin-Etsu Chemical Co. Ltd., Tokyo, said it will build a $1.4-billion ethylene plant on land the company already owns in Plaquemine (OGJ Online, Apr. 23, 2015; Apr. 16, 2014).

Construction of 500,000-tpy ethylene plant, the first ever to be built in the US by a Japanese operator, is due to be completed during first-half 2018, Shintech said.

LACC LLC, a joint venture of Axiall Corp. and South Korea’s Lotte Chemical Corp., recently let a contract to CB&I, Houston, to provide additional detailed engineering and early procurement services for a proposed grassroots 1 million-tpy LACC ethane cracker project in Lake Charles (OGJ Online, Sept. 3, 2015; Feb. 11, 2014).

While LACC continues to evaluate construction of the project, should it proceed, the proposed ethylene cracker will use CB&I’s latest ethylene technology, including its highly selective SRT cracking heaters as well as its recovery-section design, which features low-pressure separation and mixed refrigeration, CB&I said.

With a final investment decision on the project due by yearend, and pending other final approvals, the ethylene plant could begin commercial operation in late 2018 or early 2019.

Upon announcing the project in late 2013, Axiall estimated the grassroots plant would require a total investment of about $3 billion (OGJ Online, Dec. 20, 2013).

South Africa’s Sasol Ltd. said it is proceeding with construction its proposed integrated ethane cracker and downstream derivatives complex to be built next to the company’s existing operations near Lake Charles in Westlake, for which a $4-billion credit facility was secured in December (OGJ Online, Mar. 9, 2015; Dec. 23, 2014).

Sasol’s ethane cracker, due for startup in 2018, will have an ethylene production capacity of 1.5 million tpy.

Contact Robert Brelsford at [email protected].