Axiall

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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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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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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