Envisioning the Future

When Yuhuang Chemical Inc. purchased roughly 1,300 acres of land in rural St. James Parish on the west side of the Mississippi River, it marked an exciting milestone as the largest green field investment in methanol by a Chinese company in the state of Louisiana.

Yuhuang Chemical Inc., commonly referred to as YCI, is the Houston-based subsidiary of China’s Shandong Yuhuang Chemical Co. Ltd., which was established in 1986 and has fixed assets of at least $3 billion. The chemical facility complex in St. James will cost $1.85 billion and will increase economic development and positive international relations with China, while providing hundreds of jobs for locals.  

Currently, the company is building its three-phase business in St. James on land that was once the site of a sugar cane plantation. It also will expand onto territory presently occupied the St. James High School, which YCI is purchasing for more than $10 million.  

In the first phase, construction is underway for its first methanol plant construction. Mechanical completion is slated for 2018. Commercial operations will commence in early 2019, and it’s expected to produce 1.7 million tons of methanol per year. During Phase 2, YCI will increase this amount by constructing a second methanol plant. In its final phase, YCI Inc. will expand once again by building a methanol-derivatives plant.

Methanol is the basic chemical building block for many different yet widely used and important products: formaldehyde, acetic acid, DMT, methylamines, biodiesel, others. YCI’s website notes that methanol is “one of the world’s most widely used industrial chemicals since the 1800s.” Natural gas – which is abundant through existing pipeline systems in the St. James region – is a key component of methanol.  

The complex’s location in St. James is an obvious, natural fit for the company, due not just to its natural resources but also its readily available sites for project development and competitive incentive packages from the Louisiana Department of Economic Development. An article published by New Orleans Biz magazine in December of 2015 states, “The project expects to create 400 new direct jobs, with an average annual salary of $85,000 plus benefits. Louisiana Economic Development (LED) estimates the project will result in 2,365 new indirect jobs, for a total of more than 2,700 new jobs in the southeast region of Louisiana and surrounding areas of the state.”

“It’s a good way to monetize natural gas,” says Jerry Oliver, Vice President of
Manufacturing Operations in Houston. “[It’s] economically efficient, and we’re doing it in an environmentally friendly way with minimal emissions. We are producing a good product that has long-term chemical viability for the country.”

Logistics also played a key factor in opening the chemical complex in St. James: YCI has access to river, rails and roads. The methanol will be shipped by barge and rail and sold to North American customers, and will also be shipped back to its parent company in China which creates methanol-derived products, but does not produce methanol itself.

“Our work with the Port is critical to the long-term success in the methanol business,” says Oliver. 

By Sarah Ravits

 

 

Categories: Maritime