Koch Methanol, one of the subsidiaries of Koch Ag and Energy Solutions out of Wichita, Kansas has acquired an indirect minority equity interest in a $1.85 billion methanol production facility under construction in St. James Parish, Louisiana.
Koch made the agreement with Yuhuang Chemical Industries which is a wholly owned subsidiary of Shandong Yuhuang Chemical Company, Ltd.
Construction on the plant started in January 2017 and commercial production of methanol is expected to start in mid-2020. it sits on a 1,200 acre site near the Mississippi River.
As part of its investment, affiliates of Koch Methanol will receive the exclusive methanol offtake rights from the new facility, as well as construct, own, and operate the methanol terminal assets for the outbound flow of methanol via marine, rail, and truck logistics. YCI Methanol’s facility will be capable of producing approximately 1.7 million metric tons of methanol per year.
“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,” said Jim Sorlie, senior vice president with Koch Methanol. “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. Koch Methanol seeks to build long-term, mutually beneficial relationships and this investment is a good example of the opportunities we look for and we’re very excited to continue to build and grow this relationship.”