Paris-based Air Liquide will invest about $170 million in a unit that will supply oxygen for Chinese petrochemical giant Yuhuang Chemical’s planned methanol manufacturing complex in St. James Parish.
The Yuhuang Chemical plant will produce about 5,500 tons of methanol per day, making it one of the largest methanol production facilities in the U.S., based on capacity. An overall complex, to be built in three phases at an estimated $1.85 billion, will be along River Road on St. James’ west bank. It is the first major direct investment in Louisiana by a mainland Chinese company.
Air Liquide said it has entered into a long-term agreement to supply Yuhuang Chemical with 2,400 tons of oxygen per day. Air Liquide will build an air-separation unit for production of oxygen, nitrogen and argon. That unit will be connected to Air Liquide’s Louisiana pipeline system, as well as Yuhuang Chemical’s St. James site.
The new Air Liquide facility is scheduled to begin operations in the second half of 2017.
Air Liquide also recently signed a contract to license its MegaMethanol process technology to Yuhuang Chemical. The process, which converts natural gas to methanol, is part of Air Liquide’s proprietary technology portfolio.
Yuhuang Chemical officials have said construction on its complex will begin in 2016, with the first $750 million phase of its methanol project beginning operations by 2018. After the methanol plant is completed, the company will build a second $500 million methanol plant and reach an annual capacity of 3.3 million tons per year of methanol. The third phase will include a methanol derivatives plant that will produce intermediate chemicals.
“Our new agreement with Air Liquide for our first world-scale methanol unit in the U.S. will be integral in supporting our ambition of becoming a global player in the petrochemical industry,” said Charlie Yao, chief executive officer of Yuhuang Chemical.
Michael J. Graff, Air Liquide’s senior vice president for North America and South America, said Air Liquide’s collaboration with Yuhuang Chemical to supply its oxygen needs in the U.S. Gulf Coast supports the Chinese company as it broadens its business in the U.S. and abroad.
Yuhuang Chemical, a subsidiary of the $5 billion Shandong Yuhuang Chemical Co. Ltd. based in Shandong Province, is making its first foray outside of mainland China with the facility.