Chinese methanol project to break ground in Louisiana

(SeongJoon Cho/Bloomberg)
(SeongJoon Cho/Bloomberg)

The groundbreaking of a $1.85 billion Chinese investment for a Louisiana chemical plant is slated for Friday with London-based Amec Foster Wheeler newly signed on for engineering services and more.

China’s Shandong Yuhuang Chemical Co. formed the Yuhuang Chemical Inc. in Houston last year to develop the large methanol plant in Louisiana’s St. James Parish, which is between New Orleans and Baton Rouge. Methanol is primarily used to make other commercial chemicals.

The project is part of the massive growth of petrochemical projects in Texas and Louisiana as companies seek to take advantage of cheap natural gas feedstocks coming from U.S. shale plays. Earlier in September, Taiwan-based Formosa Petrochemical said it is considering building a $9.4 billion petrochemical complex in St. James Parish.

The Yuhuang methanol project will use natural gas to make methanol with Paris-based Air Liquide’s “Lurgi MegaMethanol” technology. Although the contract terms are not being disclosed, Amec Foster Wheeler said it will provide engineering, project management, procurement and early construction services. The stated goal is to extend the deal next year into a full-scope engineering and construction contract.

“Amec Foster Wheeler has provided a team with solid project delivery experience and a strong working relationship with Air Liquide, and we look forward to meeting the project’s challenges with them as our partner,” said Yuhuang President and CEO Charlie Yao in a prepared statement.

Amec Foster Wheeler and Air Liquide both have sizable Houston presences.

The facility is expected to come online in 2018 and eventually produce up to 5,000 metric tons per day of methanol.