South Louisiana Methanol Grows Plan, Seeks Joint Venture Partner For New Plant

Louisiana Gov. John Bel Edwards and Paul Moore, CEO of South Louisiana Methanol (SLM), announced January 4 a plan to build a new $2.2 billion methanol complex on a 1,500-acre site in St. James Parish on the west bank of the Mississippi River near Welcome, La.

A resurrection and expansion of a previously-announced plan, the project was originally announced in 2013 as a joint venture of New Zealand-based Todd Corporation and Texas-based ZEEP Inc., which stands for “Zero Emission Energy Plant.” The original plan called for the construction of a 1.825 million metric ton per year complex at a cost of $1.3 billion, but a drop in methanol and oil prices in 2013 prevented the project from getting underway.

Now with Todd Corporation teaming up with Saudi Arabia-based SABIC, the new iteration will be capable of producing 2 million metric tons per year, making it one of the largest methanol producers in the world.

Methanol is used in the manufacturing of plastics, polyester fibers and fabrics, fuels, pharmaceuticals and adhesives. Ready access to shale natural gas has led to a number of petrochemical complexes dotting the South Louisiana landscape, with SABIC a part owner in a petrochemical plant upriver in Geismar, La.

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“Louisiana is renowned for our productive manufacturing sector and an exceptional business climate for the world’s leading industries,” Edwards said. “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. 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.”

According to South Louisiana Methanol and Louisiana Economic Development, the proposed methanol complex would create 75 new direct jobs, 350 permanent indirect jobs and 800 construction jobs.

Project leaders aren’t quite ready to turn dirt on the new complex. The partnership is contingent on negotiations between Todd Corporation and SABIC. According to media reports, SLM and SABIC have signed a six-month initial agreement, with final closing dependent on regulatory approvals and financing.

“SLM is pleased to announce the project agreement with SABIC, who brings years of proven methanol operating experience and a global distribution network,” said SLM CEO Paul Moore. “We are pleased to be based in St. James Parish, with great Mississippi River and gas feedstock access, and a business-friendly community and state.”

Paul Aucoin, executive director of the Port of South Louisiana, whose jurisdiction includes the site for the proposed methanol project, praised the partnership.

“The Port of South Louisiana is excited to hear the developing news for the South Louisiana Methanol plant in St. James Parish,” Aucoin said. “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.”

SABIC US Methanol President and CEO Mohammed Al-Wakeel said the strategic location of the site was a big contributing factor in forming a partnership with SLM.

“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,” Al-Wakeel said. “The Port of South Louisiana and in-place transportation infrastructure make St. James Parish a great location.”