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Axiall And Joint Venture Partner Select Louisiana For $3 Billion Ethane Cracker Plant

Area Development Online News Desk (12/20/2013)
Axiall Corporation selected Louisiana as the location for a potential world-scale ethane cracker to be built in conjunction with a related ethylene derivatives plant. The capital investment by Axiall and a joint venture partner would approach $3 billion, with approximately two-thirds of the investment dedicated to the ethane cracker and the remainder to the derivatives.

Approximately $1 billion would be invested by Axiall, with a partner investing the additional capital. Axiall expects to award a front-end-engineering and design contract in early 2014. If the company’s board of directors approves the project, commercial operations could begin by 2018.

A leading chemicals and vinyl-based building products company, Axiall operates two major manufacturing complexes in Lake Charles, Louisiana, area and one in Plaquemine, Louisiana. The firm is evaluating where in the state it would build the new plants. Combined, the approximately $3 billion capital investment would result in up to 250 new direct jobs. Louisiana Economic Development estimates 2,000 to 3,000 construction jobs also would be created during the four- to five-year development of the ethane cracker and derivatives plant.

Gov. Bobby Jindal said, “Louisiana’s energy, workforce and economic development strengths continue to draw major investments from companies like Axiall that recognize there’s no better place to build their future than in Louisiana. Time after time, investors with world-scale projects are choosing Louisiana for our incomparable advanced manufacturing workforce, our rapidly improving business climate and our strategic location as an energy transmission hub with superior access to domestic shale gas.”

Axiall was formed in January 2013 from the merger of Georgia Gulf Corp. and the chemicals business of PPG. “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 current annual ethylene requirements,” Axiall Corporation President and CEO Paul Carrico. “While we are still considering a number of options and potential partners for the project, and we have not yet received final investment approval from our board of directors, we have narrowed our siting choices to Louisiana. We are excited about the prospect of expanding our footprint in the state and continuing to invest in Louisiana and its talented workforce.”

LED said the State of Louisiana has offered Axiall a competitive, performance-based incentive package to encourage the company to move forward with the projects in Louisiana. The incentive package offer is contingent upon a final investment decision by the company to proceed with the planned projects.

Axiall will begin the permitting process and certain front-end engineering and design activities as the next step in its process to select a final Louisiana site for the project. The company is evaluating potential partners for both the ethane cracker and derivative investments and expects to announce a partner in the near future.

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