Axiall continues to pursue ethane cracker project in Louisiana

07-May-15

Despite rising capital costs and weakening ethylene margins, Axiall continues to pursue its proposed 1 mln tpa ethane cracker in Louisiana. This is to meet the company's requirement for cheap ethylene to remain competitive in the chlorovinyls business, Axiall chief executive Paul Carrico has been quoted by Argus. "Our challenge is still not having cost-based ethylene to where all of our competitors will have that before it is all said and done," Carrico said. "That is a very significant portion of the vinyl chain at this point in terms of margin, so we have to deal with that in some fashion too." Axiall's proposed cracker project, a 50:50 joint venture with South Korea's Lotte Chemical, would provide feedstock ethylene for Axiall's chlorovinyls segment. Axiall's project comes amid a flurry of new ethylene capacity slated to come online in the Gulf coast region in the next several years that is driving up the cost of both building materials and labor. The Atlanta-based petrochemical producer has postponed a final investment decision on the cracker pending further cost analysis, but Carrico said it is important to leave the option on the table. "Going forward, it continues to be important to us to get an optimum position in cost-based ethylene in some fashion," he said. "We continue to study what we have on the table as well as continue to look for opportunities that might be there as some of this ethylene volume builds."