Indorama Swells Louisiana Cracker Boom

Thanks to its location on the US Gulf Coast with its booming shale gas industry and generous investment incentives to investors, the state of Louisiana is rapidly becoming a mecca for companies – in particular from Asia – seeking a low-cost location for new petrochemical and plastics production facilities.

In one of the latest projects to be announced, Thailand’s Indorama Ventures (IVL), the world’s largest PET producer, has purchased a mothballed cracker at Carlyss, near the Lake Charles chemical hub, from Occidental Petroleum and plans to revamp it to produce ethylene from shale gas-derived ethane and propane feedstock.

The $175 million project, which foresees output of 370,000 t/y of ethylene and 30,000 t/y of propylene from the end of 2017, is receiving a performance-based grant from the state of Louisiana worth $1.5 billion to cover infrastructure costs.

Through the family-backed Lohia group holding, Aloke Lohia, CEO of the Indorama group to which IVL belongs, is also said to own a stake in the mothballed cracker, once part of Equistar, the former joint venture between Occidental, Milennium and LyondellBasell and now wholly owned by the latter group.

Lohia said the revamp will make Indorama the first Thai company to take advantage of the US shale gas boom, ahead of greenfield crackers under construction such as the tentative plans put forward by Taiwan’s Formosa Petrochemical and South Korea’s Lotte Chemical.