South Louisiana Methanol plans to pursue a $2.2 billion capital investment in a new methanol complex in St. James Parish, Louisiana. Preliminary work on the project began last year at a 1,500- acre Mississippi River site. South Louisiana Methanol could begin formal construction later this year, subject to successful negotiations with a new joint venture partner, a Houston-based subsidiary of Saudi Arabiabased SABIC.
Through the project, South Louisiana Methanol and SABIC would create one of the world's largest methanol production sites, creating 75 new direct jobs with an average annual salary of $71,400, plus benefits. In addition, the project would result in an estimated 350 new permanent indirect jobs while generating 800 construction jobs at peak building activity. South Louisiana Methanol is assembling a 1,500-acre site along the west bank of the Mississippi River, approximately eight miles south of the Sunshine Bridge.
"South Louisiana Methanol is pleased to announce the project agreement with SABIC," said South Louisiana Methanol CEO Paul Moore. "SABIC brings years of proven methanol operating experience and a global distribution network, and we are pleased to be based in St. James Parish, with great access to the Mississippi River and gas feedstock, and a business-friendly community and state."
Based upon competitive trends and developments in the methanol marketplace, South Louisiana Methanol re-evaluated plans for its Louisiana project, a process that led to redesigning the plant technology and incorporating production features that will benefit the company's customers and those of its new joint venture partner, SABIC. The Louisiana plant's anticipated production capacity of 2 million metric tons per year will support domestic and international customers.
"This agreement represents part of SABIC's strategy to focus on the geographic diversification of its business, to reach new global markets and enable the company to access raw materials at competitive prices. The Port of South Louisiana and in-place transportation infrastructure make St. James Parish a great location," said SABIC U.S. Methanol's President and CEO Mohammed Al-Wakeel.
To secure the methanol project in St. James Parish, Louisiana Economic Development (LED) renegotiated incentive terms with South Louisiana Methanol, which has not yet received incentives from the State of Louisiana for the project. South Louisiana Methanol will be eligible for a $5 million performance-based grant, with $1.5 million payable upon the company making a minimum of $150 million in capital expenditures in the state. That portion of the performance-based grant would not be received prior to June 1, 2019. The remaining $3.5 million would be payable upon the start of plant operations no earlier than June 1, 2022.
In addition, South Louisiana Methanol will receive the comprehensive workforce solutions of LED FastStart®, and the company is expected to utilize Louisiana's Industrial Tax Exemption and Quality Jobs programs.
For more information, visit www.southlouisianamethanol.com or call (512) 394-7352.