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A preliminary work site for the future South Louisiana Methanol LP complex sits along La. 18 Friday, Dec. 7, 2018, in the Welcome area. Announced several years ago, though work never started, the $1.3 billion methanol production facility is heading toward a construction start in January, St. James Parish officials have said.

The developer of a massive methanol production plant in St. James Parish that was announced in 2013 but not built said it is trying to partner with a subsidiary of Saudi Arabia-based SABIC in an effort to rekindle the project.

The revised plans by South Louisiana Methanol nearly doubles the original capital investment from $1.3 billion to $2.2 billion, the company and Gov. John Bel Edwards’ administration announced Friday. 

The deal is subject to “successful negotiations” with SABIC as a joint venture partner. It would create 75 permanent jobs, according to Louisiana Economic Development, and would be one of the world’s largest methanol production sites.

Barry Williamson, president of South Louisiana Methanol, said he hopes to close the deal with SABIC toward the end of the second quarter of this year. 

If the project moves forward, the company could begin construction later this year on the 1,500-acre site on the west bank of the Mississippi River, eight miles south of the Sunshine Bridge.

South Louisiana Methanol originally announced the $1.3 billion plant along with former Gov. Bobby Jindal's administration, and said it would be completed by mid-2016. Despite landing state permission to build from state environmental regulators a year later, the facility was never built.

Williamson said market conditions — including the falling prices of methanol, which tracks closely with oil prices — "turned against us pretty strongly" after announcing the deal. 

Since then, Williamson said the company has redesigned the plant technology and increased the production capacity to 2 million metric tons per year. 

"We took that time to redesign the plant, make it more efficient … and to bring on a partner," he said, adding the plant has most major permits secured. 

Originally a partnership between New Zealand-based Todd Corp. and Texas-based Zero Emissions Energy Plants Ltd., or ZEEP, the company is now majority-owned by Todd Corp., according to LED. It will pursue the joint-venture project with a Houston subsidiary of Saudi Arabia-based SABIC.

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

LED also renegotiated the incentive package the company will receive, and said the firm has not yet received any incentives from the state for the project. The company will still be eligible for the $5 million performance-based grant it was originally promised, with $1.5 million payable once the company spends $150 million on the project. The remaining $3.5 million would be payable once the plant begins operations, and no earlier than 2022.

The company will also take advantage of the state’s Industrial Tax Exemption Program, a controversial tax break for manufacturers, along with its Quality Jobs and FastStart workforce training programs.

St. James Parish has seen a rush of industrial investment in recent years, including high-profile announcements from foreign companies like Wanhua Chemical and Yuhuang Chemical of China and the Taiwanese Formosa Plastics.

Residents and advocacy groups have protested the increasing air pollution and other environmental effects of the activity. Recently, residents and environmentalists filed an appeal of the land use approval for Formosa’s planned $9.4 billion facility, but it received conditional approval from the St. James Parish Council.

The billions in industrial spending have also heightened concerns about the need for evacuation routes in the event of a chemical incident.

South Louisiana Methanol would be the latest entrant into the methanol market, seeking to take advantage of cheap natural gas from the U.S. shale boom. Methanol is used in plastics, polyester fibers and fabrics, fuels, pharmaceuticals and more.


Follow Sam Karlin on Twitter, @samkarlin.