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IVL Signs long-term Gas Cracker Feedstock deal in the USA
Dec 12, 2016
Bangkok, Thailand – December 12, 2016 – Indorama Ventures Public Company Limited (IVL), a leading global chemical producer, today announced that the Company has signed a long-term agreement for all of its ethane and propane feedstock supply requirements for the Company's gas cracker in Lake Charles, Louisiana, with Targa Resources Corp. (NYSE:TRGP), a leading supplier of natural gas liquids (NGLs) in Mont Belvieu, Texas. Under this agreement, Targa Resources Corp. will not only supply IVL with all its ethane and propane requirements but also provide storage for these gases locally at Lake Charles.

IVL announced the acquisition of the Lake Charles ethylene cracker in September 2015. It is currently undergoing refurbishment and is expected to start up in the fourth quarter of 2017.  The cracker can process both ethane and propane feedstock to produce approximately 420,000 tonnes of ethylene and 20,000 tonnes of propylene per annum.  Indorama Ventures is already a major producer of purified ethylene oxide (PEO) and mono ethylene glycol (MEG) in the USA.

“This multi-year contract will provide IVL with 100% of our ethane needs to meet our ethylene requirements at favorable terms. The flexibility of the cracker to swing between ethane and propane will allow us to take advantage of shale gas economics as well as effectively becoming the most vertically integrated of all the PET producers in North America with accompanying integrated manufacturing cost efficiencies. The integration economics with olefins will provide IVL with significant long-term cost advantages across its North American footprint,” Mr. Lohia said.
 
Separately, Indorama Ventures has also signed a contract with Boardwalk Louisiana Midstream, LLC (Boardwalk), a subsidiary of Boardwalk Pipeline Partners, LP, for Boardwalk to provide pipeline transportation and local storage for the ethylene that will be produced at Indorama Ventures’ Lake Charles gas cracker. Boardwalk will also provide connectivity to its Evangeline Pipeline, which enables ethylene delivery to both Louisiana and Texas, where Indorama Ventures has a Oxide and Glycols facility that uses ethylene to produce mono ethylene glycol (MEG), a vital raw material for PET production, as well as purified ethylene oxide (PEO), which is a high value added chemical used by the consumer goods industry.