A Global Investment

St. James Parish welcomes a new $2.2 billion methanol complex.

Photo courtesy of South Louisiana Methanol

Economic development continues to flourish in South Louisiana, thanks to a new joint venture that will create new jobs and bring $2.2 billion in capital investment to St. James Parish. South Louisiana Methanol (SLM) is pursuing the investment with a new joint venture partner, a Houston-based subsidiary of Saudi Arabia-based SABIC, to build a new complex that would create one of the world’s largest methanol production sites. Preliminary work on the project began last year at the 1,500-acre Mississippi River site, and SLM could begin formal construction later this year after finalizing negotiations with SABIC.

The facility, which was originally announced between Texas-based ZEEP Inc. and New Zealand-based Todd Corporation in 2013, has become a project between SLM — now majority-owned by Todd Corporation — and SABIC thanks to a project agreement. The site is located along the West Bank of the Mississippi River, nearly eight miles south of the Sunshine Bridge.

“South Louisiana Methanol and SABIC recognize that our industrial corridor along the Mississippi River delivers the highest-performance port, pipeline and rail logistics available in the world,” said Governor John Bel Edwards. “We’re especially pleased that these global investors have confidence in Louisiana’s manufacturing workforce, the most productive in the nation, and that they will be contributing significantly to our economy in the coming years.”

Methanol has many applications ranging from plastics and polyester fibers to fabrics, fuels, pharmaceuticals and adhesives. According to the Methanol Institute, a growing demand for methanol equates to $35 million in new state and local taxes from a typical methanol plant. The same sized plant uses approximately 70 billion cubic feet of natural gas annually, and ready access to affordable supplies of shale natural gas have led to the development of multiple methanol projects in Louisiana. The Methanol Institute and ADI Analytics have concluded that this trend could help the United States become a net exporter of methanol in the near future, which is even better news for Louisiana.

“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,” said Paul Moore, chief executive at SLM.

SLM reevaluated the plans for this project, which led to redesigned plant technology and new production features. As such, the plant’s anticipated production capacity of 2 million metric tons of methanol per year will support both its domestic and international customers.
In order to secure the facility in St. James Parish, SLM, which had not yet received incentives from the State of Louisiana for the project, renegotiated incentive terms with Louisiana Economic Development. Under the new terms, SLM will be eligible for a $5 million performance-based grant, with $1.5 million payable once the company makes $150 million in capital expenditures in the state and the remaining $3.5 million payable upon the start of plant operations and no earlier than June 1, 2022. SLM also will receive the benefits of LED FastStart — the No. 1 state workforce training program in the nation — and the company is expected to use Louisiana’s Industrial Tax Exemption and Quality Jobs programs.

As a new entrant into the global methanol market, SLM is dedicated to investing in St. James Parish and the State of Louisiana by domestically upgrading abundant natural gas to methanol.

“This facility will continue to diversify our parish’s tax base and provide stability to the revenues that we use to educate our children and serve the needs of our residents and businesses,” said St. James Parish President Timmy Roussel. “Their commitment to utilize the services of our local businesses and suppliers will strengthen and expand our economy.”

“The Port of South Louisiana is excited to hear the developing news for the South Louisiana Methanol plant in St James Parish,” said Executive Director Paul Aucoin of the Port of South Louisiana. “The new partnership with SABIC and South Louisiana Methanol will bring more opportunities to the success of this great project. This will add to the two new large projects recently announced this past year, all good news for our port district and Louisiana.”