Indorama invests $175MM to renovate, restart Louisiana ethane cracker

Indorama Ventures will renovate and restart a dormant ethane cracker west of Lake Charles, Louisiana, where Indorama Ventures will make a $175 million capital investment, Louisiana Gov. Bobby Jindal and Indorama Ventures CEO Aloke Lohia announced on Friday.

Based in Bangkok, Thailand, Indorama Ventures, or IVL, has used its US subsidiary Indorama Ventures Olefins LLC to acquire the dormant ethane cracker facility and approximately 250 acres.

With the project, IVL will create 125 new direct jobs with an average annual salary of $50,000, plus benefits. The Louisiana Economic Development (LED) estimates the project will result in an additional 481 new indirect jobs, for a total of more than 600 new jobs in Southwest Louisiana. 

The company estimates the project will generate up to 600 construction jobs at peak building activity.

“With our world-scale infrastructure and outstanding workforce talent, Louisiana is leading the industrial renaissance in the US, with record levels of new petrochemical, processing and energy projects underway in our state," said Gov. Jindal. "Increasingly, we are witnessing the arrival of more international investors to our state because they recognize Louisiana offers the perfect blend of workforce, logistics and business climate advantages."

IVL already produces purified ethylene oxide and mono ethylene glycol in the US, with ethylene being the primary feedstock. The project in Carlyss will generate an annual production capacity of 370,000 metric tons of ethylene and 30,000 metric tons of propylene, with the facility capable of processing both ethane and propane. 

IVL currently runs intermediate petrochemical manufacturing sites located in Texas, Alabama, Georgia, North Carolina and South Carolina.

“This acquisition will make us well-placed to receive cost-advantaged ethane and propane feedstock,” Lohia said. “We are targeting a commercial startup before the end of 2017, which will make us the first Thai company to take advantage of the shale gas revolution in the US and ahead of the greenfield crackers being constructed. We are excited for this opportunity to join the Louisiana business community.”

Indorama Ventures is acquiring the ethane cracker site and facilities as a joint investment with Singapore-based Indorama Corp. IVL said it considered options in other states, including Texas, but chose Louisiana for the availability of an existing cracker facility and the strength of the state’s workforce training programs and other incentives.

LED began project discussions with Indorama in April 2015. To secure the project, Louisiana offered the company a competitive incentive package that includes a $1.5 million performance-based grant to offset site infrastructure costs. IVL also will receive the comprehensive workforce solutions of LED FastStart – the nation’s No. 1 state workforce development program. In addition, the company is expected to utilize Louisiana’s Quality Jobs and Industrial Tax Exemption programs.