Indorama Ventures Public Company Limited (IVL), a leading global chemical producer has signed a long-term agreement with Targa Resources Corp, a leading supplier of natural gas liquids (NGLs) in Mont Belvieu, Texas for all of its ethane and propane feedstock supply requirements for the Company’s gas cracker in Lake Charles, Louisiana.
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.
The Lake Charles ethylene cracker acquired by IVL in September 2015 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.
This multi-year contract will provide IVL with 100 percent of their ethane needs to meet their ethylene requirements at favorable terms. The flexibility of the cracker to swing between ethane and propane will allow them 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.
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.
Indorama Ventures is already a major producer of purified ethylene oxide (PEO) and mono ethylene glycol (MEG) in the USA.
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