Valero Energy Corp.’s previously-announced $700 million methanol plant, planned at its existing St. Charles Parish, LA, facility, has been shelved indefinitely.

A spokeswoman for the San Antonio-based mega-independent refiner told NGI this week that “after continued evaluation of the proposed methanol project at St. Charles, Valero does not have plans to move forward at this time.”

The methanol plant, announced in 2013 (see Shale Daily, July 17, 2013) would have produced 1.6 million tons/year of methanol, tapping low-cost natural gas from the nearby Eagle Ford Shale and other basins to make a wide range of products, including paints, solvents, plastics and other consumer goods.

But the project appears to be a casualty of the commodities downturn. After the company told analysts during a conference call last summer to expect a final investment decision by 4Q2015, the methanol project never came up during subsequent earnings calls.

Valero had also been looking for a partner to help shoulder some of the cost of the methanol plant.

In a note this week, analysts with Tudor, Pickering, Holt & Co. (TPH) attributed the cancellation to “deteriorating economics and the inability to find a partner for the project.” TPH said the project, which had a preliminary start-up date in 2018, likely became less attractive since “methanol prices have deteriorated with ongoing low oil prices, averaging only 46 cents/gallon in 2016” to date and 132 cents/gallon in 2014.

The project was announced under the leadership of Valero’s former CEO Bill Klesse, who stepped down in 2014 (see Shale Daily, March 5, 2014). “In our view, the cancellation of the project, which was originally proposed by the former CEO, represents another example of the current management team’s focus on limiting big projects” and capital expenditures, TPH said.

Other U.S. petrochemical projects proposed to take advantage of cheap shale gas have faced uncertain futures amid the oil price plunge that began in 2014. Last year, officials with Odebrecht SA, the Brazilian backers of a proposed ethane cracker in Wood County, WV, put plans for that project on hold due to the commodities downturn (see Shale Daily, April 23, 2015).

State officials remain hopeful that the West Virginia cracker plant, one of several ethane crackers proposed in the region alongside projects backed by PTT Global Chemical pcl and Shell Chemical Appalachia LLC in Ohio and Pennsylvania respectively, will still move forward (see Shale Daily, Jan. 28).