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Chinese Firm to Build $1.85 Billion Methanol Plant in Louisiana

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China-based Yuhuang Chemical Inc. announced a $1.85 billion capital investment in a world-scale methanol manufacturing plant in Vacherie, La. Along with the Sasol gas-to-liquid plant and Benteler Steel/Tube project nearby, it will be one of the largest construction projects in Louisiana in the next five years.

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The Chinese company has entered into an agreement to purchase 1,100 acres for a three-phase project next to the Plains All-American Pipeline terminal. The first to phases will cover the construction of two separate methanol plants with a combined annual capacity of 3 million metric tons. The third phase will include a methanol derivatives plant.

When fully operational, the facility is expected to supply up to 30% of the company's customers in North America.

"Building a new world-scale methanol unit in Louisiana is Shandong Yuhuang's first major step in becoming a global player in the petrochemical industry," said CEO Charlie Yao in a press release.

Yuhuang Chemical has selected China Huanqiu Contracting and Engineering Corp., to compete the engineering work for the project. Louisiana enticed the Chinese chemical manufacturer to set up shop in the state with two performance-based grants (totaling $10.25 million) to offset infrastructure costs. Yuhuang will also receive the comprehensive solutions of LED FastStart, a workforce training program.

Construction is set to begin in 2016 and Louisiana Economic Development says the project will generate 2,100 construction jobs at the peak of the building activity. A general contractor has yet to be selected.

The first phase of the plant is expected to commence operations by 2018.


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