Axiall, Lotte Chemical sign preliminary agreement to pursue JV for design, construction, operation of proposed 1-million-tonne/year ethane cracker, potentially to be located in Louisiana
February 11, 2014
– Axiall Corporation (NYSE: AXLL) and Lotte Chemical (KOSPI : 011170) of the Republic of Korea announced today that they 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.”
Axiall Corporation is a leading integrated chemicals and building products company. It is an international manufacturer of chlor-alkali and derivatives, chlorovinyls and aromatics products including chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride, muriatic acid, phosgene derivatives, polyvinyl chloride, vinyl compounds, acetone, cumene and phenol. It also manufactures vinyl-based building and home improvement products that are marketed under Royal Building Products, Celect™, Zuri™, Kor Flo™, Overture, S4S and Exterior Portfolio brands, including window and door profiles, mouldings, siding, pipe and pipe fittings, and decking. Axiall, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers. For more information, visit www.axiall.com.
About Lotte Chemical
Lotte Chemical is a member of the Lotte Group in Korea, which has been listed on the Korean Stock Exchange since 1991. Lotte Chemical is a leading manufacturer of petrochemical products, such as ethylene, propylene, butadiene, polyethylene, polypropylene, ethylene oxide/glycol, compound resin, polyethylene terephthalate, polycarbonate, methyl methacrylate, ethylene oxide derivatives, benzene, toluene, mixed xylene, purified terephthalic acid and purified isophthalic acid among others. Lotte Chemical, headquartered in Seoul, South Korea, has manufacturing facilities located throughout South Korea, China, Malaysia, Indonesia, Pakistan, UK and the USA. For more information, visit www.Lottechem.com.