Axiall Corporation (NYSE: AXLL) today announced that the company has selected the state of Louisiana as the location of a possible world-scale ethylene cracker to be built in conjunction with a related derivatives plant. Axiall proposes to construct the facility with a soon-to-be-named partner, and Axiall’s contemplated capital investment in the project would be approximately $1 billion. Axiall expects to finance its portion of the investment with a combination of new debt and cash on hand. The combination of Axiall’s approximately $1 billion investment with approximately $2 billion from a partner could result in a total capital investment approaching $3 billion.
Axiall is a leading chemicals and building products company with major manufacturing facilities in Louisiana – two in the Lake Charles area and another in Plaquemine.
“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,” said 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 of Louisiana and continuing to invest in its talented workforce.”
Carrico said Axiall would begin the permitting process and certain front-end engineering design activities “as the next steps in our process to select a final site for the project.” Carrico added that Axiall is evaluating possible partners for both the ethylene and derivative portions of this potential project and it expects to announce a partner in the near future.
If Axiall chooses to move forward with construction of an ethylene cracker and gains board approval, commercial operation could begin in 2018. The company projects that an ethylene cracker alone would create between 150 and 175 permanent full-time jobs once operational; a related derivatives plant would increase the number of new permanent full-time jobs to 225-250. Thousands of additional construction jobs would be created during a four-to-five year period.