A regional renaissance
Affordable, abundant natural gas – combined with Louisiana’s logistics and workforce strengths – is launching some of the world’s biggest industrial investments in Southwest Louisiana, where South Africa-based Sasol and global liquefied natural gas supplier Cheniere Energy are expanding.
In early 2016, Cheniere became the first major exporter of LNG to offshore markets after gaining U.S. Department of Energy and Federal Energy Regulatory Commission approval. The company’s recent $12 billion investment brings its total LNG investment in Louisiana facilities to $20 billion, with the ability to ship bi-directionally. As energy prices fluctuate, Cheniere will be capable of exporting or importing liquefied natural gas, a strategy also being pursued by the Cameron LNG project, a $10 billion joint venture in Louisiana by Sempra LNG and investment partners Engie (formerly GDF Suez) of France; and Mitsui, Mitsubishi and Nippon Yusen Kabushiki Kaisha (NYK), all of Japan.
“In Southwest Louisiana, we’ve got $40 billion in projects underway now, and another $40 billion to $50 billion on the schedule,” says President and CEO George Swift of the Southwest Louisiana Economic Development Alliance. “We have at least nine additional LNG projects in the pipeline.”
Due to the surging investment, employment is up 9 percent in Southwest Louisiana over the past two years – the highest growth rate in Louisiana.
Swift says the region’s infrastructure, including the Port of Lake Charles and the Calcasieu Ship Channel, has been essential in generating the industrial boom. He places a premium on continued maintenance and dredging to accommodate the robust growth. Deep-draft ship traffic is projected to double over the next decade, according to a 2014 regional impact study completed by the Growth Opportunity Group.
With a wood pellet facility in Bastrop, Louisiana, and a shipping facility in Baton Rouge, Louisiana (pictured), U.K. company Drax Group employs over 60 Louisiana workers.
“The port has been instrumental in helping to secure these projects and the ship channel is the main driver in making sure these ships get out to the Gulf (of Mexico),” Swift says.
A globally significant project is Sasol’s $11 billion petrochemical complex, which will consist of a next-generation ethane cracker and six chemical derivatives plants to be completed before 2020.
Construction began in 2015 in Westlake, adjacent to Lake Charles, where Sasol will produce 1.5 million tons of ethylene per year to enable downstream chemical applications and make possible the manufacture of detergents, cleaners, packaging, paints and adhesives. The ethane cracker complex will create 500 permanent new manufacturing jobs averaging $88,000 per year, plus benefits, and it will result in an estimated 2,395 permanent new indirect jobs in the region while generating 5,000 construction jobs at peak. Already, 3,600 construction workers are erecting piping and beginning to place massive components in place on the 650-acre site, where work is more than 40 percent complete.
Sasol’s Lake Charles Chemical Complex could also include a gas-to-liquids production facility, further rounding out Louisiana’s energy mix with 96,000 barrels per day of high-quality transportation fuels.