Lake Charles Methanol II LLC (LCM) has announced plans to invest $3.24 billion to construct a new manufacturing plant that will produce low-carbon intensity methanol and other chemicals at the Port of Lake Charles, La.
The company plans to use advanced auto thermal gas reforming technology and employ carbon capture and secure geologic storage to produce low-carbon hydrogen for conversion to methanol.
If the project moves forward, the company expects to create 123 direct new jobs in Calcasieu Parish, La., with an estimated average annual salary of $135,955. Louisiana Economic Development (LED) estimates the project would result in 605 indirect new jobs, for a total of 728 potential new jobs in the Southwest Region. LCM estimates that more than 2,300 construction jobs will be created at the peak of construction.
“I have said from day one that Louisiana must not only attract new businesses but help existing businesses like Lake Charles Methanol grow and thrive,” Louisiana Gov. Jeff Landry said in a statement. “This expansion would bring billions of dollars, hundreds of permanent high-paying new jobs and thousands of construction jobs, providing a tremendous boost to the economy of the southwest region. The state looks forward to continuing to support LCM’s efforts to bring the project to completion.”
The proposed facility would reform natural gas and renewable gas feedstocks into hydrogen, while capturing carbon dioxide, which would then be used to produce about 3.6 million tons per year of methanol. Lake Charles Methanol plans to work with a third party to capture and sequester about 1 million metric tons of carbon dioxide per year, which would reduce the carbon intensity of the hydrogen for synthesis into low carbon intensity methanol.
“The project will deliver substantial tangible economic benefits to local communities while providing an environmentally beneficial blue methanol product to facilitate the transition to low-carbon chemicals and fuels,” LCM President Don Maley said. “With the strong support of state and local officials and the local community, we believe that Lake Charles is a fantastic location for this project, and we look forward to working with all stakeholders to bring it to fruition.”
The project is currently undergoing a FEED study and regulatory permitting. A final investment decision and start of construction are expected in mid-2024. Construction and commissioning of the facility are expected to take about three-and-a-half years, which would allow commercial operations to begin in late 2027.
“Our region continues to be a hub for innovation and technology that advances our ability to provide solutions for global demands,” Calcasieu Parish Administrator Bryan Beam said. “This project is no different, and will bring major economic benefits to our region, while providing products to be utilized on an international scale.”
To secure the project in Louisiana, LED offered a competitive incentives package that includes the comprehensive workforce development solutions of Louisiana Economic Development FastStart. It also includes a Performance-Based Grant of $5 million to be used for reimbursement of company expenditures for infrastructure needs. The company is also expected to participate in Louisiana’s Industrial Tax Exemption and Quality Jobs programs.
