Axiall delays decision on ethane cracker

Published 5:57 am Sunday, February 22, 2015

Citing volatility in key U.S. markets, another petrochemical company has decided to delay its decision to build a plant in Southwest Louisiana.

Paul Carrico, president and CEO of Axiall, announced Friday that the company and its joint venture partner, Lotte Chemical of South Korea, have agreed to postpone their final investment decision to build an ethane cracker at Axiall’s Westlake plant beyond the first quarter of this year.

Carrico said uncertainty in U.S. energy, feedstock and labor markets prompted the decision. He said both partners are seeking time for “additional analysis and clarity in these areas.”

Carrico did not indicate when Axiall expects to reach a final decision on its ethane cracker project.

Axaill’s announcement came at time when the company completed its six-month front-end engineering and design study for the project. Carrico said during that time, however, “a major period of volatility in the energy and feedstock markets” occurred.

Adding to that volatility, Carrico said, was a “nearly unprecedented set of build announcements” that pressured the construction labor and engineering markets in the U.S. Gulf Coast. “Both pieces deserve more looking before we come to a final decision,” Carrico said.

Axiall’s announcement comes less than a month after Sasol executives chose to delay their $14 billion gas-to-liquids project in Westlake.

Last February, Axiall and Lotte Chemical signed a preliminary agreement to build a $2 billion ethane cracker on land bordered by Prater and Pete Manena roads.

If the project is approved by state and federal officials, Lotte Chemical has agreed to build and operate a monoethylene glycol facility adjacent to the ethylene plant. The total estimated cost of both facilities is $3 billion.

Axiall’s website indicates that both plants could begin commercial operation in 2018.””

Axiall Corp. held an unveiling ceremony for its logoed storage tank in August of 2013. The tank