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Castleton Commodities Planning $1.2B Methanol Plant in Louisiana

Castleton Commodities International (CCI) plans to invest $1.2 billion to develop a methanol manufacturing plant on the east bank of the Mississippi River in Plaquemines Parish, LA, south of New Orleans, the Stamford, CT-based commodities merchant said Friday.

The plant is designed to produce an estimated 5,000 metric tons of methanol per day, using natural gas as the key feedstock for production.

"The project location, situated along the Mississippi River near New Orleans, makes the site ideal for use in multiple projects," said CCI CEO William Reed. "The proximity to a major waterway, deepwater ports, access to natural gas pipelines, truck and rail -- in addition to an efficient and expeditious permitting process offered by Louisiana -- were major deciding factors in the selection of Plaquemines Parish for the project."

Construction is expected to begin in 2016, with an estimated two-year buildout. To secure the project, Louisiana offered CCI "a competitive incentive package that includes the comprehensive workforce solutions of LED FastStart, the nation's No. 1 state workforce development program," according to Louisiana Economic Development. "CCI also is expected to utilize the state's Quality Jobs and Industrial Tax Exemption programs."

The Gulf Coast region has been enjoying a petrochemical industry renaissance, thanks to abundant and low-cost supplies of natural gas and natural gas liquids (see Daily GPI, Feb. 21; Dec. 30, 2013).

Castleton's announcement comes just weeks after LyondellBasell said it would build a world-scale propylene oxide (PO) and tertiary butyl alcohol (TBA) plant on the U.S. Gulf Coast, probably in Texas (see Daily GPI, Aug. 26). That plant is expected to be operational in 2019 and is to have an annual PO capacity of 900 million pounds. TBA and derivatives capacity is to be 2 billion pounds per year. Feedstocks would be propylene, butane, methanol and ethanol. Late last year, LyondellBasell restarted a methanol plant in Channelview, TX, and credited low-cost natural gas for the move (see Daily GPI, Jan. 3).

In May BASF Corp., the North American affiliate of BASF SE of Germany, said it was considering developing a world-scale methane-to-propylene complex on the U.S. Gulf Coast (see Daily GPI, May 2). Earlier this year, a partnership of units of Sasol Ltd. and Ineos Europe AG said it would build a high-density polyethylene plant in the La Porte, TX, petrochemical complex southeast of Houston (see Daily GPI, June 9).

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