Westlake Chemical Buys Axiall, Enters NE Cracker Market

bigger fish smaller fishIn December MDN told you that Axiall Corporation, a large petrochemical manufacturer, had made a final investment decision to move ahead and build a $3 billion ethane cracker/petrochemical facility in Louisiana (see Final Decision: Axiall Building Ethane Cracker in LA…NE Ethane?). Based on comments and various news accounts, we shared with you the opinion that its almost certain the plant will be supplied by shale gas from the Marcellus/Utica region (see Axiall Announces New Cracker Plant for LA, Fed by NE Ethane). Axiall owns, among other things, a large petchem plant in Marshall County, WV, the former PPG chemical plant along W.Va. 2 which Axiall bought just three years ago. Last Friday Westlake Chemical, another large petchem manufacturer, announced they are buying Axiall lock, stock and barrel–for $3.8 billion. Among the comments Westlake made is that it “looks forward” to working on the ethane cracker plant in Louisiana. Welcome to the Marcellus, Westlake!…
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Final Decision: Axiall Building Ethane Cracker in LA…NE Ethane?

Two years ago Axiall Corporation, the former Georgia Gulf/PPG, announced a plan to build a $3 billion ethane cracker/petrochemical facility in Louisiana. The facility, as we noted at the time, will almost certainly use at least some ethane coming from the Marcellus/Utica region (see Axiall Announces New Cracker Plant for LA, Fed by NE Ethane). As we know only too well, making a “final investment decision” (FID) about whether or not to spend $3 billion of a company’s money (or more correctly go into debt and spend other people’s money), and take upward of 3-4 years to build a plant, is not something you just decide to do willy-nilly. It takes a looooooooooong time to get to that point. Shell announced a cracker for Pennsylvania back in 2012 and they still haven’t made an FID. It was certainly a good sign from Axiall when they announced a partnership with Lotte Chemical for their new Louisiana cracker project (see 4th World Class Marcellus/Utica Ethane Cracker…in Louisiana??). Lightening has struck! Last Friday Axiall and Lotte announced an FID has been reached and indeed they are moving forward. Horray! Of course it would be more exciting if that plant were located in PA, WV or OH rather than Lake Charles, LA (where they have enough crackers already). But we’ll take these victories when and where we can. The expected startup date is 2019…
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4th World Class Marcellus/Utica Ethane Cracker…in Louisiana??

According to the The Intelligencer/Wheeling News-Register, yet another new ethane cracker project is being planned that will be fed by Marcellus and Utica Shale ethane. Currently there is one serious proposal that increasingly seems like it will happen (Shell’s cracker plant in Beaver County, PA), one somewhat serious proposal (joint venture between Korean company PTT Global Chemical and Japanese financier Marubeni for a plant in Belmont County, OH), and one not-so-serious proposal (Brazilian company Odebrecht building a plant near Parkersburg, WV). This would be the fourth “world class” ethane cracker plant to be fed by Marcellus/Utica ethane–if it gets built. And where would it be built? Louisiana. Which doesn’t create jobs or improve the economy in the Marcellus/Utica region–hence our less-than-enthusiastic response to the news. Atlanta-based Axiall Corporation is partnering with Korean company Lotte Chemical Corporation to potentially build a new ethane cracker in the Lake Charles, LA area. Anticipated start-up would be the end of 2018, if the project goes forward…
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Gastar Wins WV Lawsuit to Keep Fracking, Completes 10 New Wells

In November we told you that Chemical manufacturer Axiall, with a plant in Natrium (Marshall County), WV, had successfully stopped Gastar from fracking several drilled shale wells located near the chemical plant (see Gastar Fracking Near WV Chemical Plant Halted Pending Court Review). Axiall was afraid that fracking the wells would release fugitive methane into their nearby brine wells. Axiall says something similar happened previously with some of their brine wells near a Triad Hunter fracking operation. But Gastar fought back and today announced a WV court has thrown out the lawsuit brought by Axiall and that Gastar is now free to frack. According to Gastar, Axiall tried to stop them in PA with a similar kind of lawsuit which was also dismissed…
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Gastar Fracking Near WV Chemical Plant Halted Pending Court Review

Chemical manufacturer Axiall, with a plant in Natrium (Marshall County), WV, has successfully stopped Gastar from fracking several drilled shale wells located near the chemical plant. Why? They’re afraid that the fracking process will allow gas to travel underground and affect their previously drilled brine wells in the area. That exact scenario, according to Axiall, played out last year when Triad Hunter fracked wells nearby. The fracking, according to Axiall, led to a blowout at one of their brine wells and the well began emitting natural gas–an explosion hazard. A judge agreed with Axiall and put a stop to any fracking by Gastar pending a full hearing before the court…
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Axiall Announces New Cracker Plant for LA, Fed by NE Ethane

Georgia Gulf, now a huge chemical manufacturer, was founded in 1985 in Atlanta, GA. The company purchased the commodity chemicals business of PPG in early 2013 and renamed the combined company Axiall Corporation. In buying the PPG properties, Axiall inherited a large chemical plant operation in Natrium (Marshall County), WV–in the heart of the Marcellus/Utica.

Axiall announced last week they plan to build a $3 billion ethane cracker plant. However, they aren’t building it in the northeast near their chemical plant operations. Instead, Axiall plans to build their new cracker plant in Louisiana where they already have three other “major manufacturing facilities.” The new cracker, if built (all companies are careful to couch their language on that point) will no doubt be fed by Marcellus and Utica Shale ethane and (possibly) ethane from other plays. The new plant will not be online until 2018 at the earliest…
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