Axiall updates plans for Louisiana ethylene project

Axiall Corp. and South Korea’s Lotte Chemical Corp. have finalized joint-venture plans for the design, construction, and operation of a proposed 1 million-tonne/year ethane cracker to be built in Louisiana (OGJ, July 7, 2014, p. 90; OGJ Online, Feb. 11, 2014).

The companies have formed LACC LLC to design, build, and operate the cracker, for which front-end engineering and design has now been completed, Axiall said.

While a final investment decision (FID) remains subject to approval by both companies’ boards, the companies are in the process of evaluating final project details, including site selection, which tentatively is planned in Lake Charles, Axiall said.

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

FID on the cracker is due in this year’s second half.

Pending final approvals, the ethylene plant could begin commercial operation in late 2018 or early 2019, Axiall said in a June 18 conference call with investors.

According to the JV agreement, Axiall will contribute a maximum capital investment of $225 million between 2015 and 2019 towards engineering, procurement and construction phases of the cracker, with Lotte, as majority owner, to cover remaining construction costs.

The amount of Axiall’s capital contribution relative to the actual cost of the cracker’s construction, then, would determine the company’s ownership stake in the cracker, Axiall said, adding that it will retain an option to increase its equity interest in the completed plant by as much as 50%.

Axiall previously estimated a total cost for the grassroots plant at about $3 billion (OGJ Online, Dec. 20, 2013).

Contact Robert Brelsford at

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