Chemical Industry Investment
At the board meeting on Dec. 17, Lotte Chemical Corp. has approved an investment to set up an ethane cracker plant with an annual production capacity of 1 million tons and an ethylene glycol (EG) plant with an annual production capacity of 700,000 tons in Louisiana, a state of the U.S.
The company has decided to invest US$860 million (1.02 trillion won) of capital in the joint project worth US$3 billion (3.54 trillion won) in total at the board meeting.
Previously, Lotte Chemical had signed a basic contract with Axiall Corp. of the U.S. for a joint ethane cracker business in February of last year. In June this year, the two companies established a joint venture with an ownership percentage of 90 percent of Lotte and 10 percent of Axiall.
Under the agreement, Lotte and Axiall will be supplied with low-priced ethylene from the ethane cracker plant according to their share rates.
The EG plant will be built in the same site with the ethane cracker plant, and it will be the single largest plant in the U.S. in terms of size. EG products, which are used as raw materials for polyester fibers and film, will be sold mainly in the Americas and Europe.
CB&I will provide technology licenses, and engineer, procure and construct the ethane cracker plant. For the EG plant, SD will provide technology licenses, while a consortium of Samsung Engineering and CD&I will be in charge of the EPC.
The project will start construction in the second half of next year and commercial production in the first quarter 2019. Once the project is completed, Lotte Chemical is expected to see an annual sales increase of US$1.5 billion (1.77 trillion won) and expand its production capacity of ethylene and EG to 3.7 million and 1.74 million tons, respectively.
Axiall Corp., headquartered in Atlanta, Georgia, is a petrochemical company that produces various chemical products and building materials. The company posted 5 trillion won (US$4.24 billion) in sales last year.