China chem producer to build $1.85bn methanol project in Louisiana

HOUSTON (ICIS)–The rush to build methanol plants in the US continued on Thursday as China-based Yuhuang Chemical announced plans to build a $1.85bn methanol project not far from another proposed methanol project.

To be located in St James Parish on the Mississippi River about halfway between Baton Rouge and New Orleans, it marks the third methanol plant announcement in the US by a China-based firm this year and the seventh proposed methanol project in Louisiana.

Texas-based “” www.icis.com=”” articles=””>South Louisiana Methanol announced plans to build a plant in St James Parish last year.

The Yuhuang project raises the number to well over a dozen new methanol plant projects that have been announced in the US during the past two years, seeking to cash in on cheap American natural gas made possible by the shale gas phenomenon.

Louisiana Governor Bobby Jindal issued a statement calling the Yuhuang project “the first major foreign direct investment by a Chinese company in Louisiana”, yet it is just the latest among more than half a dozen methanol projects that have been proposed in the state.

A quick count of Louisiana projects shows at least seven proposed methanol plants, with two each in Geismar, near Baton Rouge; two in Lake Charles near the Texas border; two in St James Parish, and one near New Orleans.

The Yuhuang project also would focus on exporting methanol to China but, unlike the project in Oregon and Washington, the Yuhuang plant would not export all of the material it makes but would sell 20-30% of its material in North America, according to a release.

Construction on the first Yuhuang plant will begin in 2016 next to the Plains All-American Pipeline Terminal. After the first methanol plant is built, Yuhuang will build a second methanol unit that, when completed, will give the firm annual capacity of 3m tonnes at the site.

The Yuhuang project’s third phase would include a plant making methanol derivatives and intermediate chemicals.

The company’s parent, Shandong Yuhuang Chemical (SYC) makes chemicals including propylene, isobutene, butadiene (BD), isoprene, styrene, toluene and others, according to the release.

SYC ranks No 456 among the leading 500 Chinese companies and No 24 among China’s Top 25 chemical companies.

The firm’s chairman, Wang Jinshu, is worth $875m according to Forbes magazine and made his fortune in chemical production.

The following lists some of the methanol projects in North America.