Valero is looking at a $700 million expansion at its Norco refinery that will serve as the fuel for the company’s first big move into the petrochemical industry.
The San Antonio company is considering building a methanol unit at the St. Charles Parish plant, which will compress natural gas into liquid in order to manufacture chemicals and plastics.
Valero sees the petrochemical industry as a field that is ripe for growth, said Bill Day, a company spokesman.
“Petrochemicals are growing faster than petroleum-based fuels,” Day said. “This is one area where we can add value to shareholders.”
Like all of the major chemical and petrochemical plant expansions that are in the works in south Louisiana, the Valero project is being driven by easy access to ample supplies of cheap natural gas in the Haynesville Shale and Texas’ Eagle Ford.
“We want to take advantage of the low costs to make feedstocks,” Day said.
The expansion is still in the planning stages, Day said, and Valero should have an idea before the end of the year on how it wants to go forward.
Construction is expected to begin in late 2015 or early 2016.
Once completed, the plant will produce about 1.6 million tons of methanol a year. The refinery produces 270,000 barrels of fuel a day.
Company officials said the expansion will create at least 100 construction jobs and 24 permanent jobs at the plant. About 530 people work at the refinery.
Valero completed a $1.4 billion expansion at the refinery in 2010, which boosted the plant’s daily production of fuel by 60,000 barrels. The refinery takes up 1,000 acres along the Mississippi River.
The company has not filed any applications for economic development incentives from the state, Day said.
The state is encouraged by Valero’s continued expansion of its St. Charles Parish operations, said Stephen Moret, Louisiana Economic Development department secretary.
“We look forward to supporting Valero as it expands its Louisiana operations with this methanol plant project,” he said.
St. Charles Parish Assessor Tab Troxler said the plant expansion will have a profound effect on the parish’s tax rolls.
In 2012, Valero paid roughly $12 million in property taxes in the parish. Troxler said the expansion could pour another $3 million to $5 million into the tax base.
“We’re always pleased that there are expansions,” Troxler said. “It says we are in a good business climate, not only in the parish but in the state. The market is strong, and people are looking to invest here in St. Charles Parish. That’s a real positive.”