Orion Engineered Carbons (NYSE: OEC), a specialty chemical company, announced plans to build the only plant in the U.S. producing acetylene-based conductive additives – a critical link in the value chain for lithium-ion batteries, high-voltage cables and other products powering the global transition to electrification and renewable energy.
Orion’s planned facility in La Porte, Texas, south of Houston, will be backed by a long-term agreement for acetylene supplied from a neighboring site owned by Equistar Chemicals LP, a subsidiary of LyondellBasell.
Acetylene is a colorless gas widely used as a chemical building block. Orion’s production process turns acetylene into a powder, which is added to lithium-ion batteries, enhancing electrical conductivity and extending the lifetime of the most valuable component of an electric vehicle. The material plays a similar role in high-voltage cables used for wind and solar farms.
Orion will invest between $120 million to $140 million in the facility, expected to start up in the second half of 2024. This investment should increase the company’s conductive additives capacity by approximately 12 kilotons per year.
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“With this investment, we will quadruple our effective manufacturing capacity of acetylene-based conductive additives,” said Corning Painter, Orion’s CEO. “We are already experiencing high demand for this material, so expanding capacity for it is one of our top investment priorities and a major milestone in our growth plans. This is a very big day for Orion.”
The company, which has a similar plant in France with locally supplied acetylene gas from LyondellBasell, is the sole producer of acetylene-based conductive additives in the European Union. The U.S. plant will bring new technology and high-skilled jobs to the country and positively impact long-term job creation for the local community. Demand for battery additives is expected to grow rapidly amid a global boom in the construction of gigafactories making lithium-ion batteries.
The plant will have a favorable environmental profile and will be subject to obtaining the routine regulatory approvals.
“Batteries will continue to play an increasingly vital role in the world’s shift toward clean energy,” Painter said. “By being a key supplier of materials to the battery industry, we’re living up to our mission of delivering solutions for a more sustainable future.”