Axiall Lotte Chemical finalize US-ethane cracker JV plans

Axiall and Lotte Chemical finalize US-ethane cracker JV plans

6:43 AM, 18th June 2015
Axiall and Lotte Chemical finalize US-ethane cracker JV plans

ATLANTA, US: Axiall Corporation and Korea-based Lotte Chemical Corporation said that the companies have finalized their joint-venture arrangements and will form a company LACC Llc to design, build and operate an ethane cracker in Louisiana that would produce approximately one million metric tonne of ethylene annually.

A final investment decision is anticipated in the second half of 2015. If approved, the plant’s anticipated start-up would be the end of 2018.

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 in Lake Charles.

If approved by Lotte’s board, Lotte Chemical also plans to build a monoethylene glycol (MEG) plant adjacent to the proposed cracker.

Financial terms of the joint venture call for Lotte to lead the project with Axiall having 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.

“If approved, the project meets our strategic objective of providing 50 percent of our future ethylene needs at advantaged cost,” said Paul Carrico, president and chief executive officer, Axiall.

“We are pleased to affirm our partnership with Axiall to develop a world-scale ethane cracker fed by US shale gas. This investment will build on Lotte Chemical’s global ethylene construction and operating capabilities and increase our manufacturing presence in the North American market,” said Soo Young Huh, president and chief executive officer, Lotte Chemical.

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