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Axiall Corp & Lotte Chemical ink JV on ethane cracker
20
Jun '15
US based Axiall Corporation and South Korean Lotte Chemical Corporation have finalised a joint venture (JV) agreement to construct an ethane cracker.

“The final investment decision remains subject to approval by boards of directors of both companies,” Axiall informed in a press release.

The companies have formed LACC LLC to design, build and operate an ethane cracker in Louisiana, USA which will produce around one million metric tons of ethylene per annum.

Since announcing their intent to partner on the project in February 2014, Axiall and Lotte have also completed a joint FEED study for the plant.

The two are now evaluating final project details, including site selection, which is anticipated to be in Lake Charles, Louisiana.

According to Axiall, a final investment decision is anticipated in the second half of 2015 and if approved, the plant’s anticipated start-up would be the end of 2018.

If approved by Lotte’s board of directors, Lotte Chemical also plans to build a monoethylene glycol (MEG) plant adjacent to the proposed cracker, in which Axiall will not have any ownership.

Lotte Chemical currently operates three crackers in Asia that produce more than 2.8 million metric tons of ethylene annually.

Axiall will have a maximum capital contribution obligation of $225 million towards the cracker during the engineering, procurement and construction phases of the project.

The amount of Axiall’s capital contribution relative to the total, actual cost of constructing the cracker would determine the amount of ownership Axiall holds in the cracker.

Axiall added that it will retain an option to increase its ownership level to up to 50 per cent of the completed plant.

“Investing for the long-term benefit of both of our companies, the announcement continues Axiall’s integration strategy,” president of Axiall Paul Carrico said.

“If approved, the project meets our strategic objective of providing 50 per cent of our future ethylene needs at advantaged cost,” Carrico too added.

“We are pleased to affirm our partnership with Axiall to develop a world-scale ethane cracker fed by US shale gas,” Soo Young Huh, Lotte Chemical chief executive officer said.

“This investment will build on Lotte Chemical’s global ethylene construction and operating capabilities and increase our manufacturing presence in the North American market,” Huh informed

Lotte Chemical is a leading manufacturer of petrochemical products, such as ethylene, propylene, butadiene, polyethylene, polypropylene, ethylene oxide/glycol, compound resin, etc.

Lotte Chemical, headquartered in Seoul, South Korea, has manufacturing facilities located in South Korea, China, Malaysia, Indonesia, Pakistan, UK and the USA.

Axiall Corporation is a leading integrated chemicals and building products company and has manufacturing facilities located throughout North America and Asia. (AR)

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