Joint Venture Axiall and Lotte Will Invest $1.9 billion in Ethane Cracker
Axiall and Lotte Chemical will make a combined $3 billion capital investment in two chemical manufacturing plants in Lake Charles in the U.S. state Louisiana. Through a joint venture called LACC LLC, a new ethane cracker facility will emerge beside Axiall’s current Lake Charles manufacturing plants in Calcasieu Parish. Additionally, Lotte will make a $1.1 billion investment in a new monoethylene glycol manufacturing plant on the same site.
Lake Charles/USA – The Axiall and Lotte announcement is the final investment decision for a project first disclosed as a potential investment in December 2013. Later, Axiall identified its investment partner for the project as Lotte, and the two companies announced a joint-venture arrangement in June 2015.
Lotte will be the sole owner of the MEG plant, with construction on that site and the ethane cracker expected to begin in 2016. Upon completion of the MEG plant, Lotte plans to export more than 600 kilotons per year to customers abroad. The ethane cracker is expected to open in early 2019, with an annual capacity of 1 million tons. Axiall plans to acquire 50 percent of that plant’s output for making vinyl chloride monomer and other products.
“Lotte’s MEG plant will be constructed on the same site adjacent to the ethane cracker”, Lotte Chemical President and CEO Soo Young Huh said. “The plant’s design capacity will make it the largest MEG plant in the U.S. The MEG products produced will be sold to customers mainly in the U.S., Europe and Asia. We expect to expand our market basis in the U.S. and Europe, in addition to our strong position in the Asian market.”
Combined, the projects will create 215 new direct jobs. Louisiana Economic Development estimates that it will also result in 1,892 new indirect jobs, for a total of more than 2,100 new jobs in Southwest Louisiana. With its project, Axiall will retain 1,600 existing workers in the Lake Charles area, and the company estimates 2,000 construction jobs will be created at peak building activity for the new plants.