US Westlake still mulling switching Kentucky cracker to ethane

01 May 2012 20:44  [Source: ICIS news]

HOUSTON (ICIS)--US vinyls producer Westlake is still considering the conversion of its ethylene plant at its Calvert City, Kentucky, complex from a propane-based one to an ethane-based one in order to take advantage of the new US feedstock cost advantage, company officials said Tuesday.

Albert Chao, chief executive officer, touted the benefits of the lower cost of ethane from the recent expansion of US natural gas production during an earnings conference call.

The US natural gas boom is driving a new cost advantage for the nation's petrochemical industry, much of which is based on ethane-based ethylene as a feedstock, over other parts of the globe where manufacturers use crude oil-based naphtha, Chao said.

He called the natgas boom and the lower cost of feedstocks a “potential game-changer” that would “have a positive impact on our industry”.

Chao confirmed that the company’s Geismar, Louisiana, facility, where an explosion and fire severely damaged its vinyl chloride monomer tower on 22 March, is expected to be back on line in mid-May. The total cost to the company from repairs and lost sales is estimated at between $5m (€3.8m) and $7m, Chao said.

The Westlake officials declined to discuss the company’s previously announced bid to acquire all outstanding shares of competitor Georgia Gulf, beyond saying that Westlake continues to expect that the acquisition would be beneficial to the company and its shareholders.

($1 = €0.76)

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By: Ken Fountain

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