South Louisiana Methanol LP and new joint-venture partner Saudi Arabian Basic Industries Corp., or SABIC, are planning a $2.2-billion capital investment to build a grassroots methanol complex in St. James Parish.
Originally announced in 2013 as a project of Texas-based ZEEP Inc. and New Zealand-based Todd Corp. Ltd., South Louisiana Methanol—now majority-owned by Todd—will pursue the JV methanol project with a Houston-based subsidiary of SABIC, Louisiana Economic Development announced this week.
Preliminary work on the project began last year at a 1,500-acre site along the west bank of the Mississippi River, about 8 miles south of the Sunshine Bridge. Formal construction on the complex will begin later this year, pending negotiations between SLM and SABIC.
The methanol plant will have a proposed production capacity of 2 million tons per year to support both U.S. and international customers.
According to LED, the methanol project will create 75 direct jobs with an average salary of $71,400 per year, plus benefits. In addition, the project will result in an estimated 350 permanent indirect jobs while generating 800 construction jobs at peak building activity.
“SABIC brings years of proven methanol operating experience and a global distribution network,” SLM CEO Paul Moore said in a statement. “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, SLM re-evaluated earlier plans for its Louisiana project—a process that led to redesigning the plant technology and incorporating production features that would benefit the company’s customers and those of new JV partner SABIC, according to the announcement.
Mohammed Al-Wakeel, president and chief executive officer of SABIC US Methanol, said the agreement with SLM 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.
To secure the methanol project in St. James Parish, LED renegotiated incentive terms with SLM. The company 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. The $1.5-million portion of the performance-based grant would not be received before June 1, while the remaining $3.5 million would be payable upon the start of plant operations and no earlier than June 1, 2022.