A few years after completing a $717 million expansion of its alpha olefins production facility in Geismar, Shell Chemical LP is eyeing another $1.4 billion project at the site to continue ramping up production.
Shell Chemical on Wednesday won approval from the state Board of Commerce and Industry for an Industrial Tax Exemption Program break for the $1.4 billion project, which the company says will create a “world scale” linear alpha olefin plant at the Geismar facility. Linear alpha olefins are used to make detergents, waxes, plastics and premium lubricants.
The Geismar expansion will be the sixth time Shell Chemical has deployed its “proprietary technology” at one of its sites to produce linear alpha olefins, according to the company’s application for the ITEP incentive.
Shell Chemical’s ITEP application says project work will include building reactors, heat exchangers and compressors, as well as boilers and turbines to generate steam and electricity. Shell will also build storage tanks, a 12,000-square-foot warehouse for equipment and materials, and a 14,000-square-foot building that will house a cafeteria and safety meeting space.
Shell Chemical will receive a roughly $17 million property tax break for the first year of the linear alpha olefins project while paying nearly $4.3 million in taxes.
Shell expects the linear alpha olefin expansion will create 12 permanent jobs with an average salary of $85,000, as well as 750 construction jobs.
Shell spokesman Curtis Smith said the company should make a final investment decision on the project by the first quarter of 2024 with production beginning in either 2026 or 2027.
In 2019, Shell Chemical completed a $717 million project to boost alpha olefins capacity from 468,000 tons per year to more than 1.4 million tons.
Shell had also been considering a $1.2 billion project in Geismar to begin producing monoethylene glycol, or MEG. However, Smith said that project has been halted for now. He declined to divulge a reason for the pause.
The Board of Commerce and Industry on Wednesday also approved an ITEP application for MCC Methacrylates Americas Inc., a subsidiary of Mitsubishi Chemical Corp., for a new methyl methacrylate manufacturing facility in Geismar. Methyl methacrylate is used to make paint, adhesives, glazes, flat-screen computer monitors, acrylic barriers and lighting displays.
MCC Methacrylates Americas will receive a $16.8 million tax break in the first year of its contract while ponying up $4.2 million that same year. The project is expected to total nearly $1.37 billion in expenses and should generate 100 permanent new jobs with an average salary of $97,000.