ST. JAMES — The Mosaic Co. is beginning engineering and design work on a potential $700 million ammonia production plant at the company’s existing Faustina site in St. James Parish, company and state officials said Friday.

The project would create 53 new direct jobs paying an average of more than $83,000 a year, plus benefits.

The fertilizer producer expects to make its final investment decision in mid-2013, after the engineering design and cost evaluation of the project are completed. Construction would start in 2014, with plant operations likely to begin in early 2016.

“Mosaic said that they will bring back more ammonia production from overseas,” Gov. Bobby Jindal said of the proposed project, citing favorable natural gas prices for the foreseeable future as an attraction.

Natural gas is used as a feedstock.

Mosaic operates two Louisiana chemical facilities on opposite banks of the Mississippi River: Faustina on the west side and Uncle Sam on the east side. Combined, the current facilities employ 379 Mosaic employees, who are supported by 235 contract employees.

The expansion project would nearly triple existing Faustina production of ammonia, with all the new production destined for sister Mosaic sites in Florida that also manufacture the company’s fertilizer products in Florida.

“As the world’s leading producer of phosphate and potash crop nutrients, Mosaic’s mission is to help the world grow the food it needs,” said Richard Krakowski, vice president-supply chain. “Our Louisiana operations are vital to that mission and ammonia is an essential part of our manufacturing processes. We’re eager to conduct the engineering and design evaluation that will lead to a final investment decision next year.”

To secure the project, the state is offering Mosaic a Modernization Tax Credit of $3 million, claimed over a five-year period, and job training services. Mosaic is expected to tap the state’s Quality Jobs and Industrial Tax Exemption incentive programs.

The Louisiana economic development department estimates the expansion would create 366 indirect jobs.

An estimated 1,400 workers would be required for plant construction.

Mosaic makes phosphoric acid at its Uncle Sam plant, combining sulfuric acid and phosphate rock shipped to the state from company mines in Florida and Peru, as well as some imported rock from other sources.

The phosphoric acid is shipped by barge across the river to the Faustina plant, where chemical processes combine phosphoric acid and ammonia to produce granular, finished fertilizer products for agricultural use. A similar process occurs in Florida, where Mosaic manufacturing sites are currently importing ammonia from Trinidad, Russia and the Middle East.

Mosaic employs about 8,000 people in eight countries.

“Mosaic’s decision to stay and expand in St. James Parish represents the breadth of opportunities in the River Parishes along the Mississippi River,” said Michael Hecht, president and chief executive officer of Greater New Orleans Inc.