A group backed by Chinese investors is considering developing a large methanol production and export facility at Shoal Point in Texas City, TX, in Galveston County.

Fund Connell USA Energy and Chemical Investment Corp. has begun engineering pre-design and feasibility studies for the project and said it expects to make a final investment decision during the second quarter of 2015.

"The abundant sources of natural gas in the Gulf Coast region and the expansion of the Panama Canal in 2016 make this location attractive for the production and exporting of methanol in large quantities as feedstock for the growing petrochemical production capacity in China," said Zhang Jun, chairman of Sinolife Insurance Co., one of the backers of the project along with the Connell Group.

If constructed, the plant at full capacity could produce up to 7.2 million tons of methanol annually for export to China in what backers said would be a new fleet of Post Panamax class tankers. Investment in the facility could be as much as $4.5 billion.

"At full development, this proposed plant could convert up to 560 MMcf of natural gas daily into methanol," Fund Connell said in its project announcement. "The proposed project would also include the construction of a new deep-water port facility to service a dedicated fleet of 1,000-foot long Post Panamax tankers to run a continual route from the Gulf of Mexico to China. The facility would be run by U.S.-based Fund Connell USA Energy and Chemical Investment.

"Shoal Point in Texas City is a large undeveloped site uniquely blessed with deep water access within a world class petrochemical complex to support the development of a substantial chemical or petrochemical manufacturing and export complex," said Bix Rathburn, president of the Galveston County Economic Alliance. "The size of this site and the proximity to the open waters of the Gulf of Mexico make this site especially valuable for prospects interested in utilizing the capabilities of the expanded Panama Canal in 2016."

In recent days, Yuhuang Chemical Inc. said it will make a $1.85 billion capital investment in a world-scale methanol manufacturing complex on the Mississippi River in St. James Parish, LA. The project by the subsidiary of Shandong Yuhuang Chemical Co. Ltd. represents the first major foreign direct investment by a Chinese company in Louisiana, according to Louisiana Economic Development (see Daily GPI, July 18).