Vinyl resin and profiles and pipe extruder Axiall will get its own, assured source of raw material ethylene through a petrochemical joint venture in Louisiana.
Axiall and partner Lotte Chemical Corp. said Dec. 17 that they will construct an ethylene plant in Lake Charles, La., where Axiall operates a chemical complex. Axiall now makes vinyl chloride monomer from purchased ethylene in Lake Charles.
The project will make Axiall fully integrated in polyvinyl chloride, from ethylene and chlorine raw materials to PVC resin and building products subsequently made from vinyl resin.
“The project is needed to enhance the long-term sustainability of existing Axiall facilities by ensuring a cost-competitive, reliable source of ethylene feedstock that will enhance Axiall's ethylene integration for its vinyl chain,” noted Jim Rock, Axiall vice president for operational excellence, in a news release.
Rock said Lake Charles was chosen because of the local skilled workforce and availability of raw materials, infrastructure and deepwater access.
Axiall and Lotte will invest $1.9 billion in the ethylene plant with nameplate capacity of about 2 billion pounds per year. Axiall will use about half of the ethylene output when the operation starts up in early 2019. Lotte will use the other half of the ethylene to manufacture monoethlylene glycol in another plant Lotte is building there.
The ethylene joint venture, to be called LACC LLC, will create about 135 new jobs in Lake Charles, while Lotte's MEG factory will employ about 80. Lotte of Seoul, South Korea, is a global petrochemical producer.
Texas was another location being considered for the ethylene plant but government financial support helped sway the decision in favor of Lake Charles. The combined projects qualify for a $4.55 million Modernization Tax Credit with the ethylene plant eligible for another $700,000 under the Economic Development Award Program. The projects also will benefit from state and federal workforce programs.
Axiall first revealed its ethylene plans in early 2014. The project is one of several ethylene plants slated for Louisiana to take advantage of extensive oil and gas shale deposits. Fracking operations in the state are generating byproduct production of ethane that is “cracked” to make ethylene, most of which is then destined to polyethylene.