Shell Chemical LP is considering a $1.2 billion expansion of its Geismar facilities, a project that would add a “world scale” mono-ethylene glycol unit.
The oil and gas giant is seeking a tax break through the state’s Industrial Tax Exemption Program. According to preliminary documents filed with Louisiana Economic Development, the project would create 23 permanent jobs and support 1,030 temporary construction jobs. The documents say Shell currently employs 653 at its Geismar site.
“The Shell Chemical LP Geismar manufacturing site has applied to (LED) for a tax exemption under Louisiana’s Industrial Tax Exemption Program (ITEP) in connection with a potential plant expansion project,” Shell Geismar spokesman Kevin Hardy said in a statement. “The application is a preliminary step in the investment evaluation process.”
Shell, which has not previously announced the project, said it has not made a final investment decision.
Economic developers in Ascension Parish have worked with Shell on the project since October 2015, said Kate MacArthur, head of the Ascension Parish Economic Development Corp.
MacArthur said she expects Shell to make a final investment decision on the project in the first half of 2019.
“We are hopeful that Shell will be successful in obtaining this tax incentive and subsequently decide to move forward with this billion-dollar investment in our parish,” MacArthur said.
The project would be the first considered in Ascension Parish under new rules implemented this summer for the state’s Industrial Tax Exemption Program, she added.
LED declined to comment on Shell’s potential expansion, citing “competitive reasons” and protecting confidential company information.
ITEP for decades has given manufacturers a 100 percent break on their property taxes on capital additions, and before 2016 was administered by the state Board of Commerce and Industry. The program exempts local property taxes.
Gov. John Bel Edwards implemented reforms reining in the program in 2016, requiring applicants to obtain local approval from school boards, sheriffs and local governing authorities. He also cut the program’s length to eight years.
This year, LED proposed a new set of rules, which kept the program at a possible 10-year exemption, but at 80 percent instead of 100 percent.
Shell last announced a major expansion of its Geismar plant in 2015, when it said it would invest $717 million in a new linear alpha olefins manufacturing unit, a project that was supposed to create 20 jobs.
That expansion was set to make Shell Geismar the largest alpha olefins production site in the world. Operations were expected to begin this year.