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Transco to Provide Natural Gas for Proposed Methanol Project in Louisiana

A natural gas transportation agreement with Transcontinental Gas Pipe Line (Transco) has been secured by a Chinese firm to begin construction of its first U.S. methanol manufacturing complex in St. James Parish, LA.

Transco agreed to provide natural gas over 20 years from points in Zone 3 to a new delivery interconnect that it would build and operate. The plant, YCI-M1, is to be sited on the Mississippi River and produce up to 1 million metric tons/year (mmty) of commercial grade methanol. Construction is scheduled to begin late this year with startup in 2017.

Houston-based Yuhuang Chemical Inc. (YCI) last year agreed to invest $1.85 billion in the complex (see Daily GPIJuly 18). YCI, the North American subsidiary of Shandong Yuhuang Chemical Co. Ltd. (SYC), plans to build the project in three phases. After the methanol plant is completed, it plans to build a second plant with capacity of 3.3 mmty. The third phase would include a methanol derivatives plant able to produce intermediate chemicals.

YCI plans to provide 350-400 permanent jobs with the new plant.

Earlier this year, Paris-based Air Liquide agreed to spend about $170 million to build a unit that would supply about 2,400 tons/day of oxygen for the YCI-M1 facility. Air Liquide entered into a long-term agreement that involves building an air separation unit that would connect to its pipeline, which serves the state.

St. James Parish is host to a variety of petrochemical facilities in the Port of South Louisiana, considered the largest tonnage port district in the United States. The surge in natural gas has attracted new business and expansions. Nucor Corp., one of the port's largest facilities, uses natural gas for its direct reduced iron plant near Convent (see Daily GPIJuly 22, 2013).

South Louisiana Methanol LP (SLM) also has a $1.3 billion methanol project underway in St. James Parish, sited across the river from the Nucor project in Convent. SLM plans to convert 180,000 MMBtu/d into 5,263 metric tons/d of methanol for delivery to Gulf Coast petrochemicals markets. Nameplate capacity would be up to 1.92 mmty. Startup is scheduled for mid-2016.

SLM already has secured the land, and it has a Title V air permit extension for construction and operation. The St. James Parish Planning Commission also has approved the project, with front-end engineering design underway. The project is slated to create 63 direct jobs with 374 estimated indirect jobs. Austin, TX-based Zero Emission Energy Plant Ltd. and New Zealand's Todd Corp. are joint owners.

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