[Photo provided by Lotte Chemical Corp.]

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Lotte Chemical Corp. next week will start full-fledged commercial production at its new ethane cracker and ethylene glycol production complex in the United States, the largest multi-billion-dollar petrochemical project done by a Korean enterprise in North America.

According to industry sources on Wednesday, the company’s commercial ethylene production will be underway next week as a trial run is completed in the manufacturing site located in Lake Charles, Louisiana. The size of this site is equivalent to 150 football fields combined.

Ethylene is basic materials to produce other chemicals essential in producing plastics, rubber and textiles. The ethylene glycol (EG) built in the same site already became operational last month.

The ethylene plant, part of a 3.5 trillion won ($3.1 billion) investment project by the Korean petrochemical company under the country’s fifth largest conglomerate Lotte Group, cracks ethane from shale gas instead of crude oil-based naphtha, a new processing method to lower production costs by 30 to 40 percent. Lotte Chemical will be the first Korean petrochemical company to produce ethane from shale gas.

The new site will have a capacity of 1 million tons of ethylene and 700,000 tons of EG per year. This will bring Lotte Chemical’s ethylene capacity to 4.5 million tons/year in total in Korea and elsewhere, which is the largest output in Asia and seventh around the world.

The U.S. operation is expected to add 1 trillion won in sales and some 200 billion won in operating profit to Lotte Chemical’s annual financial statement, according to the company. Lotte Chemical already signed a long-term contract to deliver about 70 percent of output in the U.S. site to American and European customers. The commercial operation comes as a tailwind for the company as the ethylene price rebounded to $1,100 per ton early this month from $780 per ton late last year.

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