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[Press Release] LOTTE Chemical Establishes Itself as a Hub of Shale Gas in the U.S.
2019.05.10
LOTTE Chemical Establishes Itself as a Hub of Shale Gas in the U.S.
“Hold a completion ceremony for ECC(Ethane Cracking Center) and EG(Ethylene Glycol) Plant in Lake Charles, Louisiana, U.S.”
█ Constructed the first local plant in the U.S. among chemical companies of Korea.
A significant step to move forward as a global chemical company beyond Asia.
█ “On Budget, On Schedule”…Achieved “On Budget, On Schedule” with capability to construct and operate a plant
and mutual partnerships with domestic/overseas suppliers.
USD 3.1 billion of total business cost and 1 million tons of ethylene production.
█ Attended by about 300 distinguished guests, including Prime Minister Lee Nak-yeon, Chairman of LOTTE Group
Shin Dong-bin, Governor of Louisiana John Bel Edwards and staff members of plant construction.
█ Exemplary investment cooperation case between Korea and U.S.,
creating jobs in both countries and revitalizing local economy
LOTTE Chemical has become the first Korean chemical company constructing and operating a large-scale petrochemical complex with the capacity to produce 1 million tons of ethylene and investment of USD 3.1 billion of total business cost in Lake Charles, Louisiana, U.S.
Houston, including Lake Charles, is the world’s largest oil-refining industrial region and hub for oil, gas production and logistics in the U.S. It is one of the world’s three major oil hubs, along with ARA of Europe (Amsterdam, Rotterdam, and Antwerp) and Singapore.
At 10AM U.S. local time on Thursday, May 9th, the building completion ceremony for LOTTE Chemical ECC (Ethane Cracking Center) and EG (Ethylene Glycol) Plant was attended by about 300 distinguished guests, including government officials such as Prime Minister Lee Nak-yeon, Governor of Louisiana John Bel Edwards, Commissioner of the Division of Administration Jay Dardenne, Secretary of Louisiana Economic Development Don Pierson, Senator John Kennedy, and U.S. Ambassador to Korea Harry Harris, executives from partners and suppliers such as Chairman of Westlake Chemical James Chao and CEO Albert Chao, and executives of LOTTE Group such as Chairman of LOTTE Group Shin Dong-bin, President Kim Gyo-hyun(Head of the Chemical Business Unit), CEO of LOTTE Chemical Lim Byung-yun, CEO of LC USA Hwang Jin-Goo, etc.
Chairman Shin Dong-bin expressed his gratitude in his speech, saying: “We are proud to be the first Korean petrochemical firm running a world-class facility in the U.S. Along with the growth of the firm, we will strive to play a key role in the future of the Korean petrochemical industry”.
After signing a basic agreement for joint business for an ethane cracker in February 2014, LOTTE Chemical launched construction with a groundbreaking ceremony in June 2016. After about three construction periods, LOTTE Chemical constructed a large-scale complex equivalent to the size of 152 soccer fields (approximately 1.02 million m2,) in the U.S. for the first time for a Korean chemical company.
The company announced that this new plant is expected to produce 1 million tons of ethylene a year through ethane decomposition, while the EG plant is likely to produce 700,000 tons of EG a year. In addition, a stable sales network has been preemptively established by signing about 80% or more of procurement contracts with global client companies.
The local construction and chemical companies were surprised at LOTTE Chemical’s accomplishment as the construction was finished “On Budget, On Schedule” without any delay in construction period or excess in construction costs by actively utilizing its capability to construct and operate a plant based on extensive experiences such as Surgil Project in Uzbekistan.
Although there were external difficulties such as cancellation of seven projects by global companies due to reduced cost competitiveness in shale gas with low oil prices from the second half of 2014, LOTTE Chemical made the achievement through the firm willingness of executives including Chairman Shin Dong-bin and company-wide support.
Moreover, with the aim of overcoming difficulties in increasing construction costs due to expensive material costs of overseas plant construction, the company allowed about 24 domestic companies with high-level technology and competitiveness in price to participate in the project. As a result, LOTTE Chemical not only achieved a reduction in construction costs and improved accuracy in the quality delivery of design, but also served to help domestic companies entering the overseas market.
With the operation of the U.S. plant, LOTTE Chemical said that the company has minimized the risk in fluctuating oil prices and established stable cost competitiveness by reducing dependency on naphtha as an existing raw material and increasing the use of gas material and further reinforced global competitiveness by diversifying raw materials/production bases/sales regions.
With the completion of the U.S. plant, LOTTE Chemical has Korea’s 1st and the world’s 7th-largest production capacity with about 4.5 million tons/year of global ethylene production. The company plans to grow into a world-renowned chemical company beyond Asia by operating global production bases around the world, including Uzbekistan, Malaysia, Indonesia, etc.