Taiwan’s Formosa eyes Louisiana for grassroots ethylene project

Formosa Petrochemical Corp. (FPC), a member of Taiwan’s Formosa Group, is evaluating the possibility of building a $9.4-billion ethane cracking and petrochemical complex along on the west bank of the Mississippi River in St. James Parish, La., according to the Louisiana Economic Development (LED).

In addition to ethylene, the complex, which FPC would develop in two phases, would include downstream plants for production of polyethylene as well as customized outputs of low and high-density polyethylene, ethylene glycol, polypropylene, and other derivatives, LED said.

Phase 1 of the project would involve construction of an ethylene cracker and associated plants followed by a doubling of those installations in Phase 2.

Details regarding planned production capacities at the complex were not disclosed.

Should FPC proceed with the project, construction and development on Phase 1 would begin next year, with plant recruitment to start in 2018.

Construction of the Phase-2 ethane cracker and downstream plants would follow completion of Phase 1 in 2022, LED said.

In an effort to secure the project, Louisiana has offered FPC a competitive incentive package to offset infrastructure costs that includes a $12-million performance-based grant to be paid in four equal annual installments beginning in 2018.

FPC is scheduled to take final investment decision on the proposed project by mid-2016.

Louisiana’s appeal

If approved, FPC’s project would be the second large-scale, grassroots ethylene production plant to be built in Louisiana by overseas operators.

Earlier in the year, Shintech Inc., the US subsidiary of Shin-Etsu Chemical Co. Ltd., Tokyo, confirmed its previously announced plan to invest $1.4 billion on construction of a 500,000 tonne/year ethylene plant on land the company already owns in Plaquemine, La. (OGJ Online, Apr. 23, 2015; Apr. 16, 2014).

Construction of the ethylene plant, the first ever to be built in the US by a Japanese operator, is due to be completed during first-half 2018, Shintech said.

As he did with Shintech, Louisiana Gov. Bobby Jindal laid the groundwork for FPC’s proposed complex during his 2014 economic development mission to Asia when he visited with company officials in Taiwan, LED said.

Contact Robert Brelsford at [email protected].