Chinese firms plan methanol facility in Texas

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

Fund Connell USA Energy and Chemical Investment Corp, an arm of Connell Group of China and Sino Life Insurance Co, secured a lease on a 900-acre property on Shoal Point in Galveston County, where it will begin pre-design and feasibility studies with a target date of mid-2015 for a final 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 export of methanol in large quantities as feedstock for the growing petrochemical industry in China," Sino Life Chairman Zhang Jun said in a news release.

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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 would 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 (305-meter-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.

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.

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

Fund Connell USA Energy will pay the city $200,000 for the two-year development lease, the Galveston Daily News reported.

"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 the 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," he said.

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

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