Energy Project Calls for $3B Investment

BATON ROUGE, LA-Louisiana has been selected as the location for a $3 billion energy-industrial development that could result in more than 2,400 new direct and indirect jobs.

Governor Bobby Jindal and Axiall Corporation president and CEO Paul Carrico announced yesterday that Axiall has chosen to work with Louisiana to develop a world-scale ethane cracker to be built in conjunction with a related ethylene derivatives plant.

The capital investment by Axiall and a joint venture partner would approach $3 billion, with approximately two-thirds of the that dedicated to the ethane cracker and the remainder to the derivatives plant, according to a statement from Louisiana Economic Development (LED). Axiall would invest approximately $1 billion in the proposed project – with a partner investing the additional capital – and Axiall expects to award a front-end-engineering and design contract in early 2014.

If the company's board of directors approves the project, commercial operations could begin by 2018.

A leading chemicals and vinyl-based building products company, Axiall operates major manufacturing complexes in Louisiana – two in the Lake Charles area and one in Plaquemine – and is evaluating where in the state it would build the new plants. Combined, the approximately $3 billion capital investment would result in up to 250 new direct jobs. LED estimates that together the new plants would result in an estimated 2,200 new indirect jobs, for a total of more than 2,400 new jobs. An estimated 2,000 to 3,000 construction jobs also would be created during the four- to five-year development of the ethane cracker and derivatives plant. In addition to the new jobs, Axiall would retain 1,600 existing jobs in Louisiana.

“Louisiana's energy, workforce and economic development strengths continue to draw major investments from companies like Axiall that recognize there's no better place to build their future than in Louisiana,” said Jindahl. “Time after time, investors with world-scale projects are choosing Louisiana for our incomparable advanced manufacturing workforce, our rapidly improving business climate and our strategic location as an energy transmission hub with superior access to domestic shale gas.”

Axiall was formed in January 2013 from the merger of Georgia Gulf Corp. and the chemicals business of PPG. Axiall operates more than 40 chemicals and building products manufacturing facilities in North America, where it is the third-largest chlor-alkali producer, the second-largest vinyl chloride monomer producer and the third-largest siding manufacturer.

LED began discussions with Axiall about the potential expansion projects in February 2013. The State of Louisiana has offered Axiall a competitive, performance-based incentive package to encourage the company to move forward with the projects in Louisiana. The incentive package offer is contingent upon a final investment decision by the company to proceed with the planned projects.

Axiall will begin the permitting process and certain front-end engineering and design activities as the next step in its process to select a final Louisiana site for the project. The company is evaluating potential partners for both the ethane cracker and derivative investments and expects to announce a partner in the near future.