09 November 2012 11:34 [Source: ICB]
While the final investment decision has not been made yet, the company said it has long-term contracts with BP, Air Products and Chemicals and Denbury Onshore to buy much of the material that would be made at the proposed $2.5bn (€1.9bn) plant.
BP will buy the majority of the 1m tonnes/year of methanol to be made at the plant, and Air Products will purchase all of the hydrogen and argon made there. Air Products will also provide air separation units to supply oxygen for the project, according to LCCE.
The proposed plant, at the port of Lake Charles, would turn petcoke into methanol, hydrogen, sulphuric acid and other petroleum byproducts.
The firm said it would be the first ever petcoke-to-methanol plant in the US. Petcoke is a byproduct made from refining heavy crude oil.
LCCE has obtained more than $1.5bn to finance the project in tax-exempt bonds from the Louisiana State Bond Commission and another $261m in grants from the US Department of Energy, according to the company.
But the firm still needs additional third-party financing, said Hunter Johnston, development partner at LCCE.
"A final investment decision will not be made until probably next year," Johnston said. "That will be a board decision and I can't speak for the board at all."
However, Bill Rase, executive director of the port of Lake Charles, said: "I think it's for real and going to happen."
The port of Lake Charles said that it will begin making $100m in improvements by mid-2013 at a bulk terminal for the project. "We're going to start whenever they say they're going full-bore ahead," Rase added.
The firm's parent, New York-based Leucadia National, is a holding company whose businesses include manufacturing, beef processing, gaming entertainment, real estate, medical product development and winery operations.
Gasification projects were more popular before the price of US natural gas plunged from the development of shale gas reserves.
US-based Eastman Chemical announced a gasification project in 2007 to be built in Beaumont, Texas, but abandoned it two years later, citing high capital costs, uncertain US regulations and the likely persistence of a smaller spread between prices for natural gas and oil and petroleum coke.
The project is among three gasification projects being developed by subsidiaries of Leucadia National. The others are in Mississippi and Indiana.
One source said Leucadia's announcement was a surprise, since it is difficult to picture how it could have a positive economic outlook.
"Having said that, should they build and operate the plant, it will be a good thing for us producers," the source said.
The nearby CITGO refinery will not be a petcoke supplier for the Leucadia plant, a source said.
Sample issue >>
My Account/Renew >>
Register for online access >>
|ICIS Top 100 Chemical Companies|
|Download the listing here >>|
Asian Chemical Connections