Project news rolls out of Louisiana with the regularity of a freight train clacking through town. So it only makes sense that a couple of rail-driven projects kick off a tour of projects rolling into towns across the Bayou State since the year began.
In early June, Louisiana Governor John Bel Edwards and Lacassine Operating Company CEO Van Eversull announced the company will invest $12.5 million to construct a catalyst blending plant that will create 40 new jobs in Lacassine, in Jefferson Davis Parish in southwest Louisiana. Designed to serve oil refineries throughout the world, the catalyst plant will become the anchor tenant of the Lacassine Rail Terminal operated by Rail Logix. The terminal — located along I-10 midway between New Orleans and Houston — started up operations in October 2018, and has installed 500 railcar storage spots to date, with plans to expand to more than 2,300 railcar storage spots. The rail facilities serve an industrial park of 400 acres (162 hectares) available for lease or purchase.
Lacassine Operating is a newly formed partner company of Equilibrium Catalyst Inc., founded in 1992 in New Orleans and now based in Houston. The company is the world’s leading provider of catalyst-related services in the fluid catalytic cracking category. Regional clients of the new Lacassine Operating facility will include ExxonMobil in Baton Rouge, Citgo in Lake Charles, Phillips 66 in Westlake, and the Motiva and Total Port Arthur refineries in Port Arthur, Texas.
“With the unique logistical advantages that we’re getting via Rail Logix here, we’re looking forward to a successful operation serving our clients near and far,” said Eversull, noting that his company “is growing along with the Louisiana energy economy.”
Indeed, the 2019 Gulf Coast Energy Outlook report from the LSU Center for Energy Studies found that since 2012 Louisiana’s Gulf Coast region alone has seen approximately $151.7 billion in actual and projected capital investment from the chemical industry, inclusive of LNG and other energy projects. Elsewhere, the report states, “the industrial renaissance along the Gulf Coast has led to some of the most expansive opportunities for transforming the region into a global energy export powerhouse,” including the evolution of the Louisiana Offshore Oil Port (LOOP), which handled as much 13% of all U.S. crude oil imports at its peak to new export capabilities first deployed in early 2018.
“These facilities, collectively, process U.S. hydrocarbons into value-added chemicals designed for world markets, particularly Asia where Louisiana alone has a trade surplus, not deficit, of almost $7 billion with China,” the report stated.
Not all the international energy business involves exports to Asia. Some involves FDI from other world regions.
Delek US President and CEO Uzi Yemin announced in May the energy company will invest $150 million to enhance its refinery in Krotz Springs, in the Acadiana region, via a series of projects over the next five years. The company will retain 200 existing jobs, and will create 30 new direct jobs with an average annual salary of $90,000, plus benefits.
During his economic development mission to Israel in October 2018, Gov. Edwards met with Yemin, a native of Israel. Energy was one of the industries targeted by the governor for the trade mission, and he and Yemin discussed how the company’s operations in Louisiana might be supported for future growth.
“Four months ago, we welcomed an Israel-based software technology company to Baton Rouge, where it has set up a cybersecurity partnership with LSU,” Gov. Edwards said, referencing Check Point Software Technologies. “Last week, we announced Cybint Solutions, which has roots in the Israel Defense Forces, is creating a cyber center with Bossier Parish Community College. Today, I am happy to announce a third initiative resulting from our recent trade mission to Israel.”
Shell In Feasibility Stage, Lotte in Dedication Phase
It’s early but promising in Ascension Parish, where Shell Chemicals Vice President for Gulf Coast Manufacturing Rhoman Hardy announced in May that the company will advance feasibility plans for a potential $1.2 billion manufacturing expansion at its Shell Geismar facility. At the 841-acre complex in Ascension Parish, Shell Chemical LP would build a world-scale monoethylene glycol (MEG) plant. A decision to proceed with the project could come from Royal Dutch Shell in 2020. The Geismar project would create 23 new direct jobs with an average annual salary of $100,000, plus benefits. Shell would retain 575 existing jobs at the Geismar site, with the project supporting 3,700 company jobs statewide. In addition to the retained jobs and new jobs, the project would generate more than 1,000 construction jobs.
The MEG project already has won unanimous approval from the Ascension Parish Council and the Ascension Parish School Board for parish and local property tax abatement under Louisiana’s Industrial Tax Exemption Program. LED and Shell Chemical will complete negotiations on an incentive package for the project prior to the final investment decision.
After a 1965 groundbreaking in Ascension Parish, Shell began operating the Geismar chemicals plant in 1967 and completed other major expansions in 1995 and 2002. In December 2018, Shell completed a $717 million expansion that increased its linear alpha olefins capacity by 425,000 tons to a total 1.3 million tons per year. That volume ranks the Geismar plant as the largest single-site manufacturer of alpha olefins in the world. Products at the Shell Geismar site contribute key ingredients for making personal care products, soaps, shampoos and household cleaning solutions.
In another part of the petrochemical corridor running through the state, Gov. Edwards joined Republic of Korea Prime Minister Lee Nak-yon, Lotte Group Chairman Shin Dong-bin and Westlake Chemical CEO Albert Chao as they dedicated the $3.1 billion Lake Charles Complex of Lotte Chemical.
During the past three years, Lotte Chemical developed a $1.9 billion ethane cracker on-site with Westlake Chemical as a minority investment partner.
In addition, Lotte Chemical built a $1.1 billion monoethylene glycol manufacturing plant and its new U.S. headquarters, which moved from Houston. The Lake Charles Complex, located at the junction of Interstates 10 and 210 in Lake Charles, created 265 new direct jobs, with 135 at the ethane cracker, 80 at the MEG plant and 50 at the headquarters building.
“The project began with a partnership to produce a commodity chemical, ethylene. It continued with a decision by Lotte Chemical to produce a downstream derivative, monoethylene glycol,” explained Edwards. “And the project culminated with Lotte Chemical’s decision to move its U.S. headquarters from Houston to Lake Charles. At one site, we have the major building blocks of chemical manufacturing and a company headquarters. In a similar vein, Sasol moved its research and development operations to Lake Charles before building one of the world’s largest chemical complexes here in recent years. Lotte Chemical’s investment in Lake Charles further burnishes Southwest Louisiana’s reputation as a global destination for major manufacturers.”
Capital Improvements in the Capital
Energy and chemicals are no strangers to Baton Rouge, where Gov. Edwards appeared recently with Louis Dreyfus Co. (LDC) leaders to commit state funds to help another sector: agriculture. The funds will enable the completion of a $20 million rail project that will enhance the transfer of corn, grain, soybeans and other commodities from Louisiana farmers to export vessels at the Port of Greater Baton Rouge in West Baton Rouge Parish. The Port is overseeing nearly $60 million in rail infrastructure projects that will expand commodity shipments for current and future tenants. In 2018, Union Pacific Railroad completed a $12 million interchange track project expanding potential delivery from 45 railcars to as many as 110 railcars on one train.
“As the major grain logistics tenant at the Port of Greater Baton Rouge since 2011, LDC has completed over $200 million in capital spending improvements at its Port Allen Elevator facilities. “We are pleased with the rail announcement and the State of Louisiana’s commitment to economic growth in the area,” said Adrian Isman, North America Region CEO for LDC. “It is our plan to continue to invest and grow in the region, and the rail line will help support this objective.”
“This is a tremendous economic development project that has been in the works for many years,” said Louisiana Department of Agriculture and Forestry Commissioner Mike Strain. “The expanded rail capacity will increase the volume and transfer of goods at a rapid rate. It will also allow for uninterrupted delivery of grain, wood pellets and other commodities when the river levels are too high or too low for normal commerce by barge or ship.”
Beyond the rail access project, the Port of Greater Baton Rouge will begin a third major rail project in the near future. A rail logistics facility, known as a chambering yard, will be built along the Gulf Intracoastal Waterway and expedite rail service to the LDC’s grain elevators, expedite rail delivery of wood pellets to Drax Biomass and enhance rail operations throughout the port. LDC and Drax Biomass will pledge proceeds from expanded shipments as a match for state and port funding of the future chambering yard.
Small U.S. Commerce Grant Just One Piece of the Picture in Houma
More funds headed to another mode of transportation in another region of Louisiana in June.
Assistant Secretary John Fleming of the U.S. Economic Development Administration came to Houma-Terrebonne Airport to announce a $1.35 million airport infrastructure grant from the EDA, part of the U.S. Department of Commerce, to fund taxiway, access road, ramp and utility improvements for an undeveloped 10-acre parcel that will become a Gulf of Mexico Center of Excellence for Large-Unmanned Aircraft Systems, or L-UAS. The grant will also help fund the installation of high-performance data lines connected to LONI, the Louisiana Optical Network Initiative for supercomputing applications.
Gov. Edwards signed an executive order at the event designating the airport as Louisiana’s L-UAS site with the Federal Aviation Administration, or FAA. Future improvements will include a new 40,000-square-foot hangar that will house automated navigation systems for unmanned aircraft flying the Gulf of Mexico for oil and gas, hurricane reconnaissance, coastal protection, homeland security, research and military missions.
At full development, the L-UAS Center of Excellence will create 150 new jobs, retain 70 jobs and generate $50 million in new private investment, according to EDA estimates. The announcement took place at the “super-base” hangar of helicopter transport company ERA Group Inc., which will additionally provide nearby temporary space for the new unmanned aircraft center. Fueled by the energy sector, the Houma-Terrebonne Airport ranks No. 1 in the world for the total number of helicopter flights per year.
The project has other dimensions too: Louisiana Tech University’s Dr. Sumeet Dua, who oversees research and partnerships, signed a Memorandum of Understanding with airport commission Secretary-Treasurer Joshua Alford to establish Louisiana Tech’s Department of Professional Aviation as a formal flight training and operations partner at the L-UAS Center of Excellence.
Similar MOUs are in place with Fletcher Technical Community College to train avionics, sensor and logistics technicians, along with airframe, powerplant and ground equipment mechanics; and with Nicholls State University to provide big data analytics, integration of high-speed, real-time sensors, and development of automated platforms for unmanned aircraft.
Among other Louisiana projects in recent weeks and months:
“The opening of our NEAT center as well as the renovation of our office space underscores our firm’s commitment to this market and to our people,” said Brian Rotolo, Louisiana Managing Partner, Ernst & Young LLP. “We are dedicated to advancing the firm’s purpose of building a better working world.”