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Westlake to Expand Ethylene Capacity

Westlake Chemical Corp. said Tuesday it would grow its ethane-based ethylene capacity by expanding a plant in Louisiana and possibly converting a second plant in Kentucky to ethane feedstock, part of the company's plans to capitalize on new sources of cheap ethane and other light feedstocks.

Houston-based Westlake said it would expand each of the two light feedstock ethylene crackers at its facility in Lake Charles, LA, which currently has a total capacity of 2.5 billion pounds per year. Construction would begin during planned maintenance turnarounds in order to continue providing ethylene to customers and existing internal derivatives units. The first cracker expansion will increase total capacity by 230-240 million pounds per year, more than 10%, and be completed by late 2012. The second cracker will be expanded by the end of 2014.

"We are continuing the engineering and design studies regarding the 2014 expansion and have not finalized the incremental capacity additions for the second expansion at this time," Westlake spokesman Dave Hansen told NGI's Shale Daily on Tuesday.

Westlake said it also plans to evaluate converting its plant in Calvert City, KY, from propane to ethane feedstock, citing the increasing availability of liquefied natural gas (LNG) from sources such as shale gas. The company said it was also looking at plans to expand the Calvert City facility.

"New technical developments in the natural gas industry make expansion in North America attractive," Westlake CEO Albert Chao said. "We are accelerating engineering and feedstock sourcing efforts in order to reduce our external purchases of ethylene and provide for attractive future Westlake growth. These projects provide an exciting opportunity to capitalize on advantaged feed sources expected from shale gas reserves at two of our core production sites."

Shale development is having an effect on the petrochemical industry as it tries to take advantage of light feedstocks such as ethane against a backdrop of oil prices above $100/bbl. But the industry's transition to light feedstocks is hampered by infrastructure too small to handle rising demand (see Shale Daily, March 11).

In late March Chevron Phillips Chemical Co. LP announced a plan to possibly build an ethane cracker and ethylene derivatives facility somewhere in the Gulf Coast region. The facility would be fed by shale gas reserves (see Shale Daily, March 29).

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