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Westlake Chemical to Expand Ethylene Capacity at Lake Charles, LA

Westlake Chemical Corp. will invest more than $330 million to expand its ethylene capacity by about 250 million pounds annually and make other capital improvements in Lake Charles, LA, the Houston-based company said Thursday. The expansion is expected to be completed in late 2015 or early 2016.

Following the expansion, the company's annual global ethylene capacity would be approximately 3.6 billion pounds, Westlake said.

To secure the project, Louisiana Economic Development's Business Expansion and Retention Group offered Westlake an incentive package that includes a $2.5 million modernization tax credit, to be claimed over five years. The company also is expected to utilize Louisiana's Quality Jobs and Industrial Tax exemption programs. The expansion is expected to add 480 employee and 115 core contractor jobs at the site, Westlake said.

Roughly half of the $2 billion in strategic investments Westlake has undertaken or announced worldwide for 2013-2016 are in Louisiana.

"We have enjoyed a long and rewarding relationship with Louisiana since our company's inception in Lake Charles in 1986," said Westlake CEO Albert Chao. "With the recent developments in shale technology, North America natural gas prices have provided Westlake a low-cost and abundant feedstock for our ethylene plant and the opportunity to expand our olefins business."

The announcement comes within a year of Westlake Chemical completing a $425 million chlor-alkali plant in Geismar, LA.

The Gulf Coast region has been enjoying a petrochemical industry renaissance, thanks to abundant and low-cost supplies of natural gas and natural gas liquids (see Daily GPI, Feb. 21; Dec. 30, 2013).

Castleton Commodities International recently said it plans to invest $1.2 billion to develop a methanol manufacturing plant on the east bank of the Mississippi River in Plaquemines Parish, LA, south of New Orleans (see Daily GPI, Oct. 10). The plant is designed to produce an estimated 5,000 metric tons of methanol per day, using natural gas as the key feedstock for production.

Last month, LyondellBasell said that low natural gas prices were leading it to consider a second expansion of its ethylene plant in Channelview, TX, which could add another 550 million pounds to that facility's annual capacity (see Daily GPI, Sept. 24). LyondellBasell is also planning a world-scale propylene oxide and tertiary butyl alcohol plant on the U.S. Gulf Coast, probably in Texas (see Daily GPI, Aug. 26). Late last year, LyondellBasell restarted a methanol plant in Channelview, TX, and credited low-cost natural gas for the move (see Daily GPI, Jan. 3).

In May, BASF Corp. said it was considering developing a world-scale methane-to-propylene complex on the U.S. Gulf Coast (see Daily GPI, May 2). Earlier this year, a partnership of units of Sasol Ltd. and Ineos Europe AG said it would build a high-density polyethylene plant in the La Porte, TX, petrochemical complex southeast of Houston (see Daily GPI, June 9).

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