Axiall Corp. and Lotte Chemical Corp. have decided to invest $3 billion in two new chemical plants previously proposed in Lake Charles.
Axiall and Lotte, through a joint venture called LACC LLC, will make a $1.9 billion investment in a new ethane cracker facility beside Axiall’s Lake Charles manufacturing plants in Calcasieu Parish. Additionally, Lotte will build a $1.1 billion monoethylene glycol manufacturing plant on the same site.
CB&I, which is based in The Woodlands, Texas, and has operations in Baton Rouge, said LACC awarded it a contract valued in excess of $1.3 billion to provide engineering, procurement, fabrication and construction for the ethane cracker project.
The ethane cracker will create 135 new direct jobs with an average annual salary of $75,500, plus benefits. The monoethylene glycol, or MEG, facility will produce 80 new direct jobs with an average annual salary of $87,000, plus benefits.
Louisiana’s economic development department estimates the combined projects will result in 1,892 new indirect jobs. About 2,000 construction jobs will be created at peak building activity for the new plants.
Axiall already has 1,600 workers in the Lake Charles area. It also operates facilities in Baton Rouge and Plaquemine, which employ more than 700 Axiall workers and contractors.
A project was first disclosed by Axiall in December 2013. Later, Axiall identified South Korea-based Lotte as its investment partner, and the two companies announced a joint venture 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. Lotte plans to export more than 600 kilotons per year from the MEG plant. Products will be sold to customers mainly in the U.S., Europe and Asia, said Lotte Chemical President and CEO Soo Young Huh.
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.
Jim Rock, Axiall vice president for operational excellence, said the project enhances the long-term sustainability of existing Axiall facilities by ensuring a cost-competitive, reliable source of ethylene feedstock for its vinyl product chain — in particular its plants in Calcasieu and Iberville parishes.
“Calcasieu Parish became the preferred site for a number of key reasons, including the location of raw materials, pipelines, available steam, electric power, other utilities and deepwater access,” Rock said.
Louisiana faced competition from Texas for the ethane cracker, and Texas and South Korea for the MEG production facility. To secure the projects, Louisiana offered the companies an incentive package that includes a Modernization Tax Credit of $4.55 million for the ethane cracker project.
The projects will receive Economic Development Award Program incentives of $700,000 for the ethane cracker and $1.47 million for the MEG facility to pay for site infrastructure improvements. In addition, the companies are expected to use Louisiana’s Quality Jobs and Industrial Tax Exemption programs.
Both projects will have access to LED’s FastStart workforce development program.
“Louisiana’s southwest region has witnessed a remarkable industrial renaissance over the past several years, and Axiall and Lotte are contributing significantly to the incredible economic activity in this part of our state,” Gov. Bobby Jindal said.
Axiall formed in January 2013 from the merger of Georgia Gulf Corp. and the commodity chemicals business of PPG.
Established in 1979, Lotte Chemical Corp. is a global petrochemical company based in South Korea and a member of the Lotte Group.