Axiall Corporation and Lotte Chemical Corporation of the Republic of Korea announced that the companies have reached a final investment decision to construct an ethane-based ethylene plant in Lake Charles, La. that would be expected to produce approximately one million metric tons of ethylene annually. The plant will provide partial backward integration for Axiall's vinyls business and will supply a new monoethylene glycol (MEG) facility being built by Lotte, adjacent to the new ethylene plant.
The state-of-the-art steam cracking facility will be built by LACC LLC, the joint-venture company recently formed by Axiall and Lotte, adjacent to Axiall's largest chlor-alkali chemical facility, located in Lake Charles, to take advantage of Axiall's existing infrastructure, access to competitive feedstock resources, and ethylene distribution infrastructure. The facility's anticipated start-up would be the beginning of 2019.
CB&I has been chosen to execute the main steam cracker contract, using its proprietary technology, following successful completion of front-end engineering and design, and other early-stage engineering works. LACC will engage a number of other firms to execute ancillary offsite facilities developments and tie-ins to existing infrastructure. Work began in the fourth quarter of 2015 to clear and prepare the site ahead of construction, which is scheduled to begin in the second quarter of 2016.
"Today's announcement represents a significant investment for the long-term benefit of both of our companies and a significant milestone in our company's history," said Tim Mann, Axiall president and chief executive officer. "This project is a major step forward in addressing our long-term strategy of improving our ethylene cost position in our chlor-alkali business."
"We are pleased to approve these projects and look forward to starting construction in 2016 with our partner Axiall to develop a world-scale ethane cracker fed by U.S. shale gas," said Soo Young Huh, Lotte Chemical president and chief executive officer. "This investment will build on Lotte Chemical's global ethylene construction and operating capabilities and increase our manufacturing presence in the North American market."
Ethane cracker to be built in Louisiana