Koch Methanol Investments has agreed to acquire an indirect minority stake in YCI Methanol One, which is constructing a $1.85bn methanol production plant in St. James Parish in the US state of Louisiana.


Image: Koch Methanol to take stake in YCI’s methanol production plant in US. Photo: courtesy of rawpixel/Unsplash.com.

In this regard, the global methane supplier has signed an investment agreement with Yuhuang Chemical Industries (YCI), a subsidiary of China-based Shandong Yuhuang Chemical.

Koch Methanol senior vice president Jim Sorlie said: “YCI has developed a strong execution plan for this project and we’ve been impressed with the knowledge and dedication of the team driving it forward.

“Our relationship with YCI will allow Koch Methanol to continue providing our customers with a consistent and low-cost supply of IMPCA quality methanol, both in the U.S. and in foreign markets, for years to come.”

As part of the undisclosed investment, Koch Methanol’s affiliates will get the exclusive methanol offtake rights from the new methanol production plant. Under the terms of the agreement, Koch Methanol will also construct, own, and operate the methanol terminal assets for transportation of the produced methanol through marine, rail, and truck logistics.

YCI CEO Charlie Yao said: “The decision by Koch Methanol to invest in YCI Methanol sends a clear signal to the industry about the strength of this facility.

“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.”

The St. James Parish methanol production plant, which broke ground in January 2017, is slated to enter into commercial methanol production in mid-2020. It will have an annual production capacity of around 1.7 million metric tons of methanol.

The engineering, procurement and construction (EPC) of the methanol production plant is being carried out by the John Wood Group (Wood) under a $604m contract given to Amec Foster Wheeler by YCI in September 2017. The following month, Amec Foster Wheeler merged with Wood.