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Entergy Louisiana to supply power to Chinese-owned methanol facility

Entergy Louisiana LLC signed a 10-year agreement to supply power to a $1.85 billion methanol complex being built by a Chinese-owned chemical company in St. James Parish, La., near the banks of the Mississippi River, the Entergy Corp. utility subsidiary said March 22.

Entergy Louisiana will supply power to YCI, the U.S. subsidiary of Shandong Yuhuang Chemical Co. Ltd., that has started construction on the 1.7 million metric ton, $1.5 billion first-phase of its project. Phase one is expected to be completed by the first quarter of 2020, both Entergy Louisiana and YCI said in a joint news release.

The St. James Parish site is roughly halfway between New Orleans and Baton Rouge, La., and gives YCI access to high-voltage electric service as well as to a deepwater dock, rail transportation, industrial gases and pipelines that will deliver the facility's natural gas feedstock. Williams Cos. Inc. subsidiary Transcontinental Gas Pipe Line Co. LLC has been approved to provide 161,500 Dth/d of natural gas transportation service through an expansion of its interstate transportation system for a 20-year period beginning in 2019.

Yuhuang Chemical, which will export its methane to China, first announced the St. James project in 2014 and secured the site in August 2015. Due to abundant supplies of natural gas and a strong international market, as well as deepwater ports, other foreign companies have shown interest in building methanol production facilities in the area.

Industrial sales trend higher

In February, Entergy Louisiana reported its 2017 billed electric energy sales. On a retail basis sales came to a total of 55.24 GWh, with 54%, or 29.7 GWh, to industrial customers.

The Entergy subsidiary's industrial sales have been on a steady rise since 2013, when 25.7 GWh were sold. Since 2014 its retail residential sales have been on a steady decline, and totaled 13.3 GWh in 2017.

Entergy Louisiana owns approximately 8,500 MW of generating capacity. It has two combined-cycle gas turbine facilities under construction with combined capacity of 1,974 MW that are to come online in 2019 and 2020. The utility has estimated the combined cost of those two facilities at $1.74 billion.

Jeffrey Ryser is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.