Maritime Economic Development: South Louisiana

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Yuhuang Chemical plans to establish a $1.85 billion methanol manufacturing complex on the Mississippi River that will create thousands of jobs and pump millions of tons of cargo annually through the Port of South Louisiana.

$1.85 Billion Yuhuang Chemical Methanol Project Planned in South Louisiana Port District

Port of South Louisiana Executive Director Paul Aucoin on July 18 welcomed Governor Bobby Jindal and Yuhuang Chemical CEO Charlie Yao for the announcement that the company will make a $1.85 billion capital investment in a methanol manufacturing complex on the Mississippi River.

Yuhuang Chemical Inc. is a subsidiary of Shandong Yuhuang Chemical Co. Ltd., has secured an option to purchase more than 1,100 acres in St. James Parish for the three-phase project. St. James is one of three parishes that comprise the South Louisiana port district.

The venture will create 400 new direct jobs, with an average annual salary of $85,000, plus benefits. In addition, Louisiana Economic Development (LED) estimates it will result in 2,365 new indirect jobs, for a total of more than 2,700 new jobs in the Southeast Louisiana and surrounding areas of the state. At peak building activity, the company estimates the project will generate 2,100 construction jobs. Construction will begin in 2016. First phase operations are expected to begin by 2018.

After the first methanol plant is completed, the company will build a second plant and reach an annual capacity of 3 million metric tons per annum. The third phase entails construction of a methanol derivatives plant that will produce intermediate chemicals. Most of the methanol will be exported by oceangoing vessels for use in the parent company’s production of downstream chemicals in China. Approximately 20 percent to 30 percent of the production will be shipped by barge and rail to North American customers.

The incentive package Louisiana offered Yuhuang included performance-based of $9.5 million to be paid over five years beginning in 2017 to offset infrastructure costs and $1.75 million to be paid over 10 years to partially defray the costs of necessary riverfront access and development. In addition, the company will benefit from the LED FastStart® workforce training program. It also is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs.

"We are happy to welcome Yuhuang Chemical to the Port of South Louisiana, St. James Parish and the River Region," said Port Executive Director Aucoin. "With expected methanol exports of up to 3 million metric tons annually, the company will not only create 400 well-paying jobs within our district, but also enhance the Port of South Louisiana’s standing in foreign trade and maintain our standing as the largest energy transfer port in the United States."

Port of South Louisiana Executive Director Paul Aucoin speaking during the news conference where Yuhang Chemical’s planned $1.85 billion methanol project was announced. Gov. Jindal is standing to the far right.
Photo/Port of South Louisiana