Methanex makes second Geismar plant official

A second methanol plant that Methanex is relocating from Chile to Geismar will employ 35 people and result in 207 indirect jobs.

State and company officials made the official announcement at Lamar-Dixon Expo Center in Gonzales on Thursday, though news of the relocation got out in February when the Canadian company reported its fourth-quarter earnings.

That statement was later contradicted by company officials, who said no decision on the relocation had been made yet. They later said the decision would be made by summer.

Gary Rowan, Methanex vice president for corporate development, attributed the decision to relocate the two 1 million-ton capacity facilities because of the Gulf Coast’s infrastructure, skilled workers and “very positive, low-risk” business climate.

He said having an asset in this region will also allow the Vancouver-based company to supply its long-term customers in North America reliably.

When asked about the impact low natural gas prices had on relocating, Rowan said that natural gas is “the dominant cost factor that goes into the manufacture of methanol” and is one of the “prime determinants” of where to locate.

But he added that North America also has “enormous reserves” of natural gas, making it “extremely reliable.”

“We can count on it coming in day after day,” he said during a news conference.

Methanol, a versatile liquid chemical used in a variety of products from windshield wiper fluid to gasoline blends, is produced primarily from natural gas.

The first plant relocation will create 130 jobs directly and 996 indirectly, bringing the total combined direct jobs to 165 and indirect jobs to 1,203, according to the state.

At another building on Lamar-Dixon’s campus Thursday, Methanex was conducting a job fair to fill openings on its first plant.

The second plant will include a $550 million capital investment, according to the Louisiana Economic Development department.

The state estimates construction of the two facilities will result in about 2,500 construction jobs.

Combined, Methanex will be making a $1.1 billion investment in Ascension Parish.

Gov. Bobby Jindal noted the number of economic development announcements that have been in Ascension in recent years and hinted more could be coming.

“I know this will not be the last time we’ll be coming back to Ascension to make a significant announcement, based on the companies that have expressed an interest in coming here,” Jindal said.

In an interview, Meg Mahoney, Methanex public affairs manager, said the first shipment to relocate the first plant in Punta Arenas, Chile, left last week and is expected to take 30 days to reach Louisiana.

Rowan said the first plant is expected to be finished at the end of 2014. The second plant will be finished by early 2016, he said.

The state Economic Development department said it has offered Methanex a $1.2 million performance-based grant for infrastructure improvements, plus other standard incentives.

Parish incentives are also being discussed for the second plant, said Mike Eades, president and chief executive officer of the Ascension Economic Development Corporation. He said the package is set to go before the Ascension Parish Council Finance Committee May 6.

For Methanex’s first plant, the Parish Council agreed construction rebates from its 1-cent sales tax, but an estimated value was not immediately available.

Tony Bacala, chief deputy of Ascension Parish Sheriff Jeff Wiley, said the sheriff has reached a verbal agreement with Methanex on incentives for the first plant only.

The deal, which has not been finalized, would rebate half of the sheriff’s half-cent sales tax actually paid on construction materials and equipment after the project is finished. The rebate would be worth an estimated $400,000, Bacala said.