U.S. Chemical Industry Plans $5 Billion in Second-Quarter 2016 Construction Starts

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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info currently is tracking 113 chemical processing capital projects with an investment of more than $5 billion planned to begin construction during the second quarter. The projects include new facilities, plant expansions and upgrades.

Most of the spending for the quarter is located in Louisiana, with a total of $4.2 billion in projects. Accounting for over half of that amount are two large capital projects. An ethylene unit addition in Westlake, Louisiana is being developed by LACC LLC, a joint venture between Lotte Chemical Corporation (Seoul, Korea) and Axiall Corporation (NYSE: AXLL) (Atlanta, Georgia). This $2 billion project will provide ethylene as a feedstock for Axiall's nearby current operations and for Lotte Chemical's $1 billion planned monoethylene glycol (MEG) unit. Both the ethylene unit and the MEG unit are anticipated to begin construction in April.

After much planning, Shell Chemicals, a unit of Royal Dutch Shell plc (NYSE: RDS.A) (The Hague, Netherlands), is nearing the construction kick-off in June for a fourth alpha olefins (AO-4) unit in Geismar, Louisiana. Once completed, this $750 million unit is expected to produce approximately 930 million pounds per year of alpha olefins. Shell is also in the early planning phases to build a complementary isomerization-disproportionation unit (ID-3). However construction kick-off isn't likely to be for a few years.

The remaining three highest-value projects set to kick off in the second-quarter of 2016 are:

• $170 million Air Separation Plant in Saint James, Louisiana
• $80 million Hydroprocessing Catalyst Unit Addition (ISBL) in Sulphur, Louisiana
• $70 million Intermediates Plant in Baton Rouge, Louisiana

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