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Major construction of USD9.4B Formosa plastics plant in St. James delayed until virus vax

October 22/2020

MOSCOW (MRC) -- According to The Advocate, a Formosa Plastics affiliate planning a USD9.4 billion petrochemical complex in St. James Parish will defer "major construction" of the facility until the coronavirus has subsided or "an effective vaccine is widely available," reported Hydrocarbonprocessing with reference to a company spokeswoman's statement.

The global pandemic's widespread impacts, "including the challenge it creates in evaluating construction costs and the restrictions it has placed on international travel, are being felt across all industries and businesses," Janile Parks, spokeswoman for FG LA LLC, said in a statement.

Despite the setback for FG LA, site work is expected to continue through the second half of 2020 on the company's nearly 2,400-acre property in northwestern St. James, just down the Mississippi River from the Sunshine Bridge.

The complex, which would be built in two phases along the Mississippi, has been seen as a big economic development win for the state, bringing 1,200 permanent jobs, thousands more temporary construction jobs and millions of dollars in sales and property tax revenue for local and state governments.

Gov. John Bel Edwards and parish government officials in St. James hailed the plant's arrival at the time it was announced in April 2018.

FG LA is a member of Formosa Plastics Group.

Several coronavirus vaccines are in clinical trials that can take months to complete to determine their effectiveness and any harmful side effects.

Dr. Robert Redfield, director of the US Centers for Disease Control and Prevention, told Congress late last month that he expected it would take until March or April to get 700 million vaccine doses but until midsummer to vaccinate enough people around the country to return to normal.

Parks, in her statement, did not pin down how much the virus would have to subside, absent a vaccine, before the company would resume work.

Virus positivity rates have been dropping in St. James Parish and across much of the Baton Rouge region as mask mandates and social distancing measures have helped slow the virus's spread. But many health experts say they fear a new wave of cases in the fall and winter as people head back indoors and virus fatigue lingers.

The FG LA announcement represents another of the virus's uneven blows to the economy, which has simultaneously boosted demand for things like personal protective equipment - a boon to petrochemical manufacturers - but also devastated other sectors, like tourism, travel, dining and entertainment.

Once finished, the facility would generate the building-block chemicals - ethylene glycol, polyethylene (PE) and polypropylene (PP) - used in a variety of plastic products, from playground equipment to protective masks.

But the plant has faced stiff opposition from residents who would live near the complex and an array of local and national environmental groups concerned about the plant's future air emissions and rainfall runoff discharges.

Known as the Sunshine Project, the proposal has also crossed into the persistent environmental justice questions that hover around major new industrial complexes in the river corridor between Baton Rouge and New Orleans.

Parish zoning changes adopted in the mid-2010s had helped steer FG and other new plants into small and predominantly poor Black communities surrounded by large tracts of old farming land in western St. James.

Federal and state permitting agencies have said, however, the project has met the mark in their environmental justice analyses.

The discovery of previously unknown graves on FG's site just south of the Sunshine Bridge has also complicated the picture.

Advocates contend the graves hold the bodies for enslave Black people who once worked the agricultural land and that FG has missed other graves. FG says it can't be known for sure without more research who is buried in the ground but will protect the sites it has found.

FG says it has received all environmental permits needed to begin construction of the facility and has been doing site work for some time, recently telling a federal judge it would work around the known grave sites.

But the company is currently defending its wetlands permit in a federal court in Washington, D.C., and air permit in a state court in Louisiana.

The wetlands dispute is expected to come to a head in the next several weeks as the parties drive for a ruling on summary judgment - or one based solely on the law and without the need for a fact-gathering trial.

FG's site work includes the previously planned widening of La. 3127, utility relocations, soil testing, placement of test piles and a pipeline removal.

FG LA ran into delays early this year for some of that work due to high water levels in the Mississippi. The US Army Corps of Engineers restricts soil disturbances near the levee when the river is high.

Independent Commodity Intelligence Services, a publication and business information company that provides pricing and other market data to its subscribers, first reported the construction delay Monday.

As MRC informed before, Formosa Plastics USA, part of Formosa Petrochemical, has left a force majeure on polyvinyl chloride (PVC) supplies from its Texas and Louisiana plants in force as of 12 October. The force majeure circumstanses were announced in mid-August, 2020, due to difficulties to produce the product amid upstream steam cracker problems.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
Author:Margaret Volkova
Tags:PVC, PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, Formosa, Russia, USA.
Category:General News
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