Axiall Corp, Lotte Chemical ink Heads of Agreement for 50:50 JV 1 mln tpa ethane cracker

11-Feb-14

Axiall Corporation and Lotte Chemical have signed a Heads of Agreement to pursue a 50/50 joint venture arrangement for the design, construction and operation of a proposed 1 million metric ton/year ethane cracker. Consistent with Axiall's initial announcement December 19, the potential cracker would be located in Louisiana. The parties expect to jointly award a front-end engineering design (FEED) contract for the cracker in the first quarter of 2014. In addition, Lotte Chemical would begin a FEED study for a wholly owned monoethylene glycol plant to be located adjacent to the potential cracker. Both plants could begin commercial operation in 2018 if the projects are approved by each company's Board of Directors. "As part of Axiall's long-term growth strategy, we believe it is important we have further integration with cost-based economics on 50 percent of our annual ethylene requirements," said Paul Carrico, Axiall president and chief executive officer. "We are pleased to partner with Lotte Chemical to pursue a joint ethane cracker. Lotte Chemical has a global presence in the chemicals industry, and the fact that it currently operates three crackers with more than 2.8 million metric tons of ethylene capacity worldwide demonstrates that Lotte Chemical would be a strong and experienced partner in this important strategic investment." "We are pleased to enter this partnership with Axiall to develop a world-scale ethane cracker fed by U.S. shale gas," said Soo Young Huh, president and chief executive officer of Lotte Chemical. "This investment will build on Lotte Chemical's global ethylene construction and operating capabilities and increase our manufacturing presence in the North American market."