First Major Chinese Investment in Louisiana

First Major Chinese Investment in Louisiana


Yuhuang Chemical Inc., a subsidiary of Shandong Yuhuang Chemical Co. Ltd., plans to invest $1.85 billion (1.37 billion EUR) in a world-scale methanol manufacturing complex on the Mississippi River next to the Plains All-American Pipeline terminal in St. James Parish, LA, USA.

The company has secured an option to purchase more than 1,100 acres (4,451 m2) for this three-phase project. It plans to build two methanol plants with a combined capacity of 3 million tonnes/year and a methanol derivatives plant to produce intermediate chemicals. Construction is scheduled to begin in 2016, the first phase of the project will begin operations by 2018. China Huanqiu Contracting & Engineering Corp. (HQC) will conduct engineering work, and Air Liquide Global E&C Solutions will provide licensed methanol technology. Yuhuang Chemical says hiring will begin next year.

According to Yuhuang Chemical, most of the methanol will be exported for use in Shandong’s production of downstream chemicals in China. 20–30 % of the methanol will be sold to North American markets.

The project is the first major foreign direct investment by a Chinese company in Louisiana. The Louisiana Economic Development estimates that it will create 2,700 jobs for the state. To secure the project, the state offered Yuhuang Chemical an incentive package that includes $9.5 million (7.02 million EUR) to be paid over five years beginning in 2017 to offset infrastructure costs of the project; and $1.75 million (1.29 million EUR) to be paid over ten years to partially defray the costs of necessary riverfront access and development.

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