The company announced last week it was investing $1.85 billion in a methanol manufacturing complex along the Mississippi River in St James Parish, about an hour drive from the center of New Orleans.
 

The three-phase project will include building a facility in phases one and two that will produce 3 million tons of methanol annually, and phase three will see construction of a methanol derivatives plant to produce intermediate chemicals, according to Charlie Yao, CEO of Yuhuang Chemical.
 

Most of the project's methanol will be exported by large ships to China's coastal areas, while 20 to 30 percent of the methanol will be shipped by barge and rail and sold in the North American market.
 

Yao believes the first overseas investment by Shandong Yuhuang makes a lot of sense, citing the low cost of natural gas in Louisiana due to the shale-gas revolution, the low cost of electricity, an ample supply of water along the Mississippi River and a close location for international shipping.
 

He said although the capital cost might be higher in Louisiana than in China and the supply chain is long, sending methanol back to China's coastal areas via big ships of 30,000 to 50,000 deadweight tonnage will make it "highly competitive" compared with methanol manufacturers in China, mostly in west China, who rely on trucks and rail for transport.
 

"The big methanol market along the Chinese coast is what we are aiming at," Yao told China Daily.
 

He praised the Louisiana government for building good infrastructure to support the development of the chemical industry. The main natural gas pipeline is less than a kilometer from the proposed methanol facility.
 

Yuhuang Chemical has secured an option to buy more than 1,100 acres of land for the project next to the Plains All-American Pipeline terminal.
 

The Louisiana government, which began discussing the potential project with Yuhuang Chemical in February, has offered the company a competitive incentive package that includes two performance-based grants: $9.5 million to be paid over five years beginning in 2017 to offset infrastructure costs of the project and $1.75 million to be paid over 10 years to partially defray costs of necessary riverfront access and development, in addition to enjoying the state's favorable job training and tax policies.
 

Yao described these as "milestones" for the project. He revealed that engineering design has begun and the company is aiming for ground-breaking in 2015 instead of the publicly announced more conservative date of 2016.
  

The project is expected to create 400 new direct jobs with an average salary of $85,000, plus benefits. The Louisiana Economic Development (LED) estimates that it will also result in 2,365 new indirect jobs. At the peak of building activity, the company estimates that the project will generate 2,100 construction jobs.

Please contact us in case of Copyright Infringement of the photo sourced from the internet, we will remove it within 24 hours.