• Welcome!
    |
    ||
    Logout|My Dashboard

Chinese firms secure leases for Shoal Point - The Galveston County Daily News : News

October 22, 2014

Chinese firms secure leases for Shoal Point

Print
Font Size:
Default font size
Larger font size

Related Stories

Related Documents

Posted: Wednesday, July 23, 2014 12:00 am | Updated: 10:53 pm, Tue Aug 5, 2014.

TEXAS CITY  — Chinese firms considering the county for a possible multibillion-dollar methanol plant secured leases on the property near the Texas City Dike where the plant would be built.

The project would be on the 900-acre Shoal Point peninsula, which is near the Port of Texas City across the ship channel from the Texas City Dike.

The $4.5 billion plant is to be developed by the Chinese firms of Connell Group of China and Sino Life Insurance Co. through their U.S. arm, Fund Connell USA Energy and Chemical Investment Corp.

While a positive sign, Texas City has yet landed the project, said C.B. “Bix” Rathburn, CEO of the Galveston County Economic Alliance.

Texas City is in competition with a site near Donaldsonville, La., for the plant.

County Judge Mark Henry is confident the Texas City location will come out on top.

"We have met on several occasions with the Chinese group and each meeting is more serious," Henry said. " I'm happy the group has taken such a serious interest in Galveston County and we will continue to sell our position as their "best location" for this project."

The Shoal Point leases with the city and the Texas General Land Office allow the Chinese partners to continue due diligence to determine which of two U.S. sites would get the project.

The city and county are working on economic incentives to help lure the project, and the state may also offer some help.

It is projected that during construction, which could begin as early as next year, the project would generate 1,000 direct jobs. Indirect construction jobs could top 200, officials said.

It is estimated that as many as 500 people would work at the facility.

The plant would have the capability of producing about 7.2 million tons of methanol annually and would ship almost all of the feedstock chemical to China. The company also is building several ships to make the trek from the Gulf of Mexico to China.

Each of the ships will be the new generation of Post Panamax.

The 1,000-foot long ships are specifically designed to traverse through the Panama Canal, which will be expanded by 2016.

Part of the Texas City project would include the construction of a deep-water port facility at Shoal Point to accommodate those ships.

Fund Connell USA Energy will pay the city $200,000 for the two-year development lease, Texas City Mayor Matt Doyle said. The partnership would pay a similar amount to the state for its portion of the site, Doyle said.

The county judge said he is looking to maintain a balance with incentives.

" We've talked about a phased approach to abatements that offers financial incentive without leaving county taxpayers empty," Henry said. "I don't have the exact numbers, but it's basically a percentage of investment achieves a greater percentage of abatement, but there's no scenario where there are no new taxes to the county."

The state, through the General Land Office, controls about 600 acres of the site, with Texas City controlling the remaining 300 acres.

“The company will immediately begin evaluation of the site as well as the permits required to operate the proposed (plant),” Rathburn said.

Methanol is a chemical feedstock that is produced using natural gas, of which the state, the Upper Texas Coast in particular, has an abundance, because of fracking.

“The abundant sources of natural gas in the Gulf Coast region and the expansion of the Panama Canal in 2016 make this location attractive for the production and exporting of methanol in large quantities as feedstock for the growing petrochemical production capacity in China,” Sinolife Chairman Zhang Jun said.

As the partnership looks at moving forward, county, city and state officials will be looking at what needs to be done to land the project.

Last week, economic development officials meet with Gov. Rick Perry’s office.

Doyle said the city already has a general outline of the economic and in-kind incentives it would offer. He expects that outline will change “hundreds of times” before any deal is secured.

The trick, he said, would be to balance what is fair to the company and property taxpayers. That is why the traditional tax abatement may not be part of the city’s package.

Texas City in recent years has instead used targeted tax rebates to lure businesses to the city. Such agreements give companies a similar incentive, but are based on the actual taxable value of the project.

Rathburn said that while the company indicated it would like to make its final decision by the second quarter of 2015, he wouldn’t be surprised if a decision comes sooner.

The deal originally came to the county alliance from the governor’s office. Perry’s office reached out to Gartman, who brought in Rathburn to help on the project. Gartman retired as CEO of the county alliance two months ago but is still working on this project.

Doyle remarked how quickly the project went from a suggestion to agreements in five months.

“I give all the credit to Bix, who has worked really hard to make this deal come together,” Doyle said.

Access to natural gas and ports with the capability of taking advantage of the soon-to-be-expanded Panama Canal have, of late, made Texas and Louisiana attractive to Chinese chemical firms.

On Monday, Chinese-owned Yuhuang Chemical Inc. announced plans to build a $1.85 billion methanol plant in St. James Parish, La.

Mainland Editor T.J. Aulds may be reached at 409-683-5334 or tjaulds@galvnews.com.

The project would be on the 900-acre Shoal Point peninsula, which is near the Port of Texas City across the ship channel from the Texas City Dike.

The $4.5 billion plant is to be developed by the Chinese firms of Connell Group of China and Sino Life Insurance Company through their U.S. arms Fund Connell USA Energy and Chemical Investment Corporation.

While a positive sign, Texas City has yet landed the project, C.B. "Bix" Rathburn, CEO of the Galveston County Economic Alliance, said.

Texas City is in competition with a site near Donaldsonville, La., for the plant.

The Shoal Point leases with the city and the Texas General Land Office allow the Chinese partners to continue due diligence to determine which of two U.S. sites would get the project.

The city and county are working on economic incentives to help lure the project, and the state may also offer some help.

It is projected that during construction, which could begin as early as next year, the project would generate 1,000 direct jobs. Indirect construction jobs could top 200, officials said.

It is estimated that as many as 500 people would work at the facility.

The plant would have the capability of producing about 7.2 million tons of methanol annually and would ship almost all of the feedstock chemical to China. The company also is building several ships to make the trek from the Gulf of Mexico to China.

Each of the ships will be the new generation of Post Panamax.

The 1,000-foot long ships are specifically designed to traverse through the Panama Canal, which will be expanded by 2016.

Part of the Texas City project would include the construction of a deep-water port facility at Shoal Point to accommodate those ships.

Fund Connell USA Energy will pay the city $200,000 for the two-year development lease, Texas City Mayor Matt Doyle said. The partnership would pay a similar amount to the state for its portion of the site, Doyle said.

The state, through the General Land Office, controls about 600 acres of the site, with Texas City controlling the remaining 300 acres.

“The company will immediately begin evaluation of the site as well as the permits required to operate the proposed (plant),” Rathburn said.

Methanol is a chemical feedstock that is produced using natural gas, of which the state, the Upper Texas Coast in particular, has an abundance.

“The abundant sources of natural gas in the Gulf Coast region and the expansion of the Panama Canal in 2016 make this location attractive for the production and exporting of methanol in large quantities as feedstock for the growing petrochemical production capacity in China," Sinolife Chairman Zhang Jun said.

As the partnership looks at moving forward, county, city and state officials will be looking at what needs to be done to land the project.

Last week, economic development officials meet with Gov. Rick Perry’s office.

Doyle said the city already has a general outline of the economic and in-kind incentives it would offer. He expects that outline will change “hundreds of times” before any deal is secured.

The trick, he said, would be to balance what is fair to the company and property taxpayers. That is why the traditional tax abatement may not be part of the city’s package.

Texas City in recent years has instead used targeted tax rebates to lure businesses to the city. Such agreements give companies a similar incentive, but are based on the actual taxable value of the project.

Rathburn said that while the company indicated it would like to make its final decision by the second quarter of 2015, he wouldn’t be surprised if a decision comes sooner.

The deal originally came to the county alliance from the governors office. Perry's office reached out to Gartman, who brought in Rathburn to help on the project. Gartman retired at CEO of  the county alliance two months ago but is still working on this project. 

Doyle remarked how quickly the project went from a suggestion to agreements in five months.

“I give all the credit to Bix, who has worked really hard to make this deal come together,” Doyle said.

Access to natural gas and ports with the capability of taking advantage of the soon-to-be-expanded Panama Canal have of late made Texas and Louisiana attractive to Chinese chemical firms.

On Monday, Chinese-owned Yuhuang Chemical Inc. announced plans to build a $1.85 billion methanol plant in St. James Parish, La.