Chinese firms eye huge methanol plant for Texas

Updated: 2014-07-24 11:15

By Adelina Zhang in New York (China Daily USA)

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Chinese firms are looking into building a $4.5 billion methanol production and deep-port export facility in Shoal Point, Texas City, Texas. If completed, it will be one of the largest plants of its kind in the world.

Fund Connell USA Energy and Chemical Investment Corporation secured a lease on a 900-acre property in Galveston Country, where they will begin engineering pre-design and feasibility studies a target date of mid-2015 for a final go-ahead decision.

"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 Sinolife Chairman Zhang Jun in a press release.

At full capacity, the facility could convert up to 560 million cubic feet of natural gas into methanol daily producing 7.2 million tons of methanol a year for export to China, where it can be used to produce plastic and other chemicals.

The plans include construction of a new deep-water port facility to service a dedicated fleet of 1,000-foot long Post Panamax tankers that will run a continual route from the Gulf of Mexico to China. The ships are specially designed for the newly expanded Panama Canal which will be finished in 2016.

Methanol is used in manufacturing everyday products, such as plastic and paint, and is produced from natural gas, of which Texas has an abundant supply thanks to fracking technology.

The facility would also create up to 500 new jobs, with an average annual salary of $70,000 depending on the final plant design and as many as 200 ancillary on-site contract jobs. The multi-year construction would also provide 1,000 jobs.

Fund Connell USA Energy will pay the city $200,000 for the two-year development lease, Port of Texas City Mayor Matt Doyle said, in a Galveston Daily News article.

"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 C.B. Rathburn, president and CEO of Galveston County Economic Alliance.

"The size of this site and the proximity to the open waters of the Gulf of Mexico make it especially valuable for prospects interested in utilizing the capabilities of the expanded Panama Canal in 2016."

Jim Suydam, Texas General Land Office press secretary, said the state organization controls approximately 630 of the 900 acres being leased. The rest of the land is owned by Port of Texas City.

"This will allow them to make immediate feasibility studies and research and potentially build a plant there," he said.

Alan Lammey, an energy markets analyst in Texas, said that it is not unusual for China to invest in the US, particularly with their increasing amount of commerce.

"In various points of business, including energy, there is a great need for methanol plants, not only here in Texas, but also in California. It is not unusual to see a lot of foreign investments coming to the United States," said Lammey, in an interview

For China Daily

(China Daily USA 07/24/2014 page2)