Westlake Chemical Focuses on Kentucky Ethylene Expansion

Researched by Industrial Info Resources (Sugar Land, Texas)--Having finished a major turnaround and expansion this summer at its Petro 1 ethylene unit in Lake Charles, Louisiana, Westlake Chemical Corporation (NYSE:WLK) (Houston, Texas) has turned its attention to next year's plant expansion at Calvert City, Kentucky.

Westlake completed the 250 million-pound-per-year expansion at its Petro 1 unit in July, at an estimated cost of $330 million. During the company's third-quarter earnings conference call, executives said they expect total capital expenditures this year to run between $600 million and $650 million, up from earlier expectations of between $475 million and $525 million.

Chief Financial Officer Steve Bender said third-quarter 2016 costs and lost sales associated with the Petro 1 project, along with an unplanned outage at Calvert City and other planned turnarounds, totaled about $57 million.

The company is still working on capital expenditure guidance for 2017. Looking forward, Bender said, "We have scheduled our Calvert City ethylene unit turnaround and expansion for the first quarter 2017, and we expect the unit to be down for approximately three weeks."

The Calvert City project will expand ethylene capacity there by 70 million pounds per year. For related information, see June 14, 2016, article - Westlake Chemical Looks to More Long-term Ethylene Opportunities after Axiall Acquisition.

Westlake recently completed its $3.8 billion acquisition of Axiall, including Axiall's share in a 1 million-metric ton-per-year grassroot ethylene project located in Westlake, Louisiana. The ethylene project is a joint venture with Lotte Chemical (Seoul, South Korea). Most of the ethylene produced by the plant will supply a $1 billion monoethylene glycol (MEG) plant to be operated by Lotte. In addition, the plant will provide nearly half of the total ethylene used by Axiall for its existing manufacturing facilities at the site. The project broke ground this summer and is expected to be completed in 2019. For related information, see September 1, 2016, article - Westlake Chemical Completes Acquisition of Axiall.

Westlake reported net income of $65.6 million for the just-ended quarter, down from $183.6 million in third-quarter 2015. The company said the drop was due to costs associated with the Axiall acquisition as well as costs tied to the Petro 1 expansion and turnaround, along with those from the unplanned outage at Calvert City.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.