Formosa Boasts $14 Billion in U.S. Activity, but Top Project Faces New Hurdles

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Researched by Industrial Info Resources (Sugar Land, Texas)--Formosa Plastics Group (Taipei, Taiwan) is making strides on several major projects along the U.S. Gulf Coast, where the Permian Basin is providing a seemingly endless supply of natural gas feedstock to petrochemical and plastics facilities. But legal headwinds could put the brakes on the company's single largest domestic investment. Industrial Info is tracking more than $14 billion in active, U.S.-based Formosa projects, more than $4 billion of which are under construction.

Click on the image at right for a graph detailing Formosa's active U.S. projects, by project type.

Formosa's largest U.S. endeavor, the St. James Parish Petrochemical Complex in St. James, Louisiana, has seen its fair share of ups and downs since the start of the year. The St. James Parish Council ratified land-use restrictions in January for the facility, which would include a 2.6 billion-pound-per-year ethylene unit and downstream derivatives units. It is a key part of Formosa's larger Sunshine Project, which has an estimated total investment value of $9.4 billion. For more information, see Industrial Info's project report.

Formosa is seeking permits for the project, which may have been complicated by a ruling late last month on one of the company's other facilities: According to Louisiana newspaper The Advocate, a federal judge ruled Formosa's plastics complex in Point Comfort, Texas, had committed "enormous" violations of state law and the U.S. Clean Water Act and is a "serial offender" that had repeatedly allowed plastic pellets to wash into wetlands and bays along the Gulf of Mexico.

A public hearing is set for July 9 on the air permits needed for Formosa's St. James facility, at which environmental activists and local residents are expected to cite the federal judge's findings. Further complicating matters: Louisiana's Department of Environmental Quality officials said Formosa has not submitted the permit application for its water discharge application, where controls on pellet releases might be addressed, according to The Advocate. Formosa believes the first phase of construction on the St. James complex could be complete in early 2023, but many significant delays could be ahead.

Ironically, the plastics complex in Point Comfort that spurred much of the St. James facility's woes is undergoing a major, multi-year series of expansions, the largest of which is the Olefins 3 Ethylene Unit addition. The new unit, which is designed to produce about 2.65 billion pounds per year of high-purity ethylene, is set to wrap up later this year--as is the Polyethylene 3 Unit addition, which is expected to produce 882 million pounds per year of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE). For more information, see Industrial Info's reports on the Olefins 3 and Polyethylene 3 projects.

Point Comfort projects that are under construction and set to wrap up in 2020 include the new Ethylene Oxide/Ethylene Glycol Unit 2 addition, which is expected to produce about 1 billion to 1.2 billion pounds per year of ethylene oxide (EO) as feedstock for the production of ethylene glycol (EG); a new low-density polyethylene (LDPE) unit, which will produce about 881 million pounds per year of LDPE; and a new air-separation unit, which will produce about 1,200 tons per day of oxygen and nitrogen. For more information, see Industrial Info's reports on the EO/EG, LDPE and air-separation projects.

Also on the Gulf Coast, Formosa is preparing to begin construction later this year on its polyvinyl chloride (PVC) resins facility expansion in Baton Rouge, Louisiana. The company plans to boost capacity at the 949 million-pound-per-year complex by about 20% via a new production train. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.