Investor: Contracts show Lake Charles plant progressing

A $2.5 billion chemical plant may be getting closer to reality in Lake Charles. Leucadia National Corp. announced today that it has signed contracts to sell methanol, hydrogen and carbon dioxide from a plant that would convert an oil refinery byproduct called petroleum coke. “This is quite a milestone for our project,” says Hunter Johnston. Johnston is the son of former U.S. Sen. J. Bennett Johnston, a Louisiana Democrat. The father’s Johnston Development Co. is a joint venture partner in the project. Leucadia is still looking for investors to help pay for the plant; it hopes to start construction by mid-2013, if it can raise the money and get environmental approval. The plant would employ 165 people when finished, and create up to 1,500 construction jobs during the 40 months it will take to build. New York-based Leucadia is also trying to develop gasification plants in Moss Point, Miss., and Rockport, Ind. Those aren’t as far along as the Louisiana facility, though. Leucadia says a unit of BP PLC has agreed to buy the majority of the methanol, while Air Products and Chemicals would buy hydrogen. Both firms had earlier signed letters of intent but have upgraded to contracts, Johnston says. BP could use the methanol to make chemicals or could seek to blend it into gasoline. Air Products sells hydrogen to chemical plants. Denbury Resources earlier signed a 20-year contract to buy all the carbon dioxide the plant would make. More details are available in the full story here.