Thailand's Indorama buys US gas cracker from OxyChem

Source: ICIS News


Interview article by Pearl Bantillo

SINGAPORE (ICIS)--Thailand’s Indorama Ventures Ltd (IVL) has agreed to buy a shale gas-based cracker in the US from Occidental Chemical Corp (OxyChem), with investment costs at “a fraction of what we had originally planned” to build one, a company spokesperson told ICIS on Friday.

The cracker is located in Lake Charles, Louisiana, and can process both ethane and propane feedstock to produce about 370,000 tonnes/year of ethylene and 30,000 tonnes/year of propylene.

“We have not disclosed the price we paid… but the cost in total will be about 50%-60% less than a new cracker, and this includes payment to OxyChem and the cost of refurbishment in one cost,” said Richard Jones, head of investor relations and corporate communications at IVL.

IVL bought a 76% stake in the US cracker, which is currently non-operational.

“The remaining 24% will be held by Indorama Corporation, a Singapore company. OxyChem has sold out,” Jones said.

“We are working with Indorama Corp as they did something similar with a cracker they acquired in Nigeria,” he added.

The cracker is expected to start commercial production before the end of 2017 on completion of required refurbishment and maintenance, IVL had said in a filing to the Stock Exchange of Thailand.

The cracker was idled in the first quarter of 2001 by Equistar, which was a joint venture between Lyondell Chemical, Millennium Chemical and OxyChem. OxyChem leased the land and facilities to Equistar, according to Jones.

OxyChem is a producer of polyvinyl chloride (PVC) resins, chlorine and caustic soda, with operations based in North America.

The acquisition fits into IVL's overall strategy to be a vertically integrated polyester producer, Jones said.

“This entry into the cracker business means we will be integrated fully into our feedstocks in North America,” he said, citing that IVL produces purified terephthalic acid (PTA) operations in Canada and monoethylene glycol (MEG) in Texas, as well as downstream polyethylene terephthalate (PET) and fibres and yarns. (Please see table below)

“We have not made a final decision yet regarding whether to sell captively or into the market but are weighing our options,” Jones said, referring to the olefins output of the Lakes Charles cracker.

IVL CEO Aloke Lohia had indicated in an interview with ICIS in May 2014 that the company is looking at building a cracker project in the US with partners.

The acquisition of Oxychem’s cracker in Lake Charles “is the fulfilment of the goal to participate in the shale gas revolution in the USA”, according to Jones.

Asked whether IVL would be keen to increase the olefins capacity of the cracker, Jones said: “We have no plans to debottleneck the capacity at this time.”

“We have no plan to build any other crackers in the USA now. The acquisition fulfils our objectives and costs a fraction of what we had originally planned,” he added.

Indorama's current petrochemical capacity in the US


North Carolina

225,000 tonne/year


Clear Lake

358,000 tonne/year


Clear Lake

435,000 tonne/year



432,000 tonne/year


South Carolina

400,000 tonne/year

Indorama recently bought a 550,000 tonne/year purified terephthalate plant in Canada from CEPSA.