Koch Methanol, part of Koch Industries, has taken an indirect minority stake in Yuhuang Chemical Industries’ (YCI) proposed $1.85 billion methanol plant in St. James Parish, Louisiana, USA.

Construction on the 1.7 million t/y facility started in January 2017 and commercial production is expected to begin in mid-2020. As part of the deal, Koch gets exclusive rights to the methanol offtake and will also build, own and operate a terminal for the outbound flow of material by ship, rail and truck.

Jim Sorlie, Koch Methanol’s senior vice president, said the relationship with YCI will allow Koch to continue providing a consistent and low-cost supply of methanol both in the US and in foreign markets for years to come.

“The new facility is located in a region with convenient access to natural gas, a highly skilled workforce and world-class transportation infrastructure, allowing us to be very competitive in our production and distribution. If viable, there is also sufficient land to add a second and third plant,” said Charlie Yao, YCI’s CEO. The project is supported by a syndication loan arranged and led by Bank of China.

Air Liquide said in February 2015 it had signed a long-term agreement to supply YCI with 2,400 t/d of oxygen for the methanol complex, which will use the gases group’s proprietary MegaMethanol process technology. At that time, YCI said it planned to build a second $500 million methanol plant, lifting capacity to 3.3 million t/y. A third phase could include a methanol derivatives plant.