While much of the nation is experiencing industry-wide slowdown, Louisiana’s petrochemical sector is proving a boon to job growth, and it’s even managing to bring some jobs back from foreign outsourcing.
Methanex Corp, a Canada-based methanol powerhouse, has methanol plants across the globe, but the company recently dismantled two facilities in Chile and moved them to North America. The new location is nowhere other than Geismar, Louisiana, south of Baton Rouge. A small industrial hub, the town is also home to companies like Chevron Corp, Westlake Chemical, DelTech Controls and Airgas INC.
One of the relocated plants is already back up and running. Methanex announced on January 24 that Geismar 1 began producing methanol, and the company has worked through the following weeks to bring the plant up to capacity.
The second facility, aptly dubbed Geismar 2, is currently under construction. Methanex hopes to bring the plant online in the first quarter of 2016. Relocating and rebuilding the two facilities came with a $1.4 billion price tag. Both plants have a one-million-metric-ton capacity.
Methanex isn’t just bringing jobs to Louisiana, it’s bringing about 165 good jobs. In January 2015, the company was named an Employer of Choice by the Cambridge University Students’ Union (CUSU). Among the requirements for the program were a set of procedures and values including engagement, talent management, learning and development, a commitment to sustainability and company transparency. Geismar 1 employs about 130 permanent jobs, and when Geismar 2 is complete, it will need about 35 full-time employees.
A driving factor of the decision to move business to the United States, according to the Greater Baton Rouge Business Report, was the lower natural gas prices combined with supply shortages in Chile. Although the announcement to move the facilities was made two years ago, the deal has likely been sweetened by incredibly cheap natural gas.
Like oil prices, natgas spot prices have suffered in recent months. Henry Hub prices alone are down to just 47 percent of what they were a year ago. February 2015 saw a high of $6 per million British thermal units (MBtu), but last month, prices were sitting at a low of $2.87 per MBtu.
Although the move from Chile to Louisiana came with hefty expenses, the low gas prices put the icing on the cake for the transition. Louisiana’s well-established energy industry comes with a seasoned workforce and already-existing energy infrastructure.