$3bn blue hydrogen-based methanol project announced in Louisiana

Lake Charles Methanol (LCM) will invest $3.24bn to build an industrial facility feature blue hydrogen production and carbon capture and storage (CCS) for low-carbon methanol production.

Located at the Port of Lake Charles in Louisiana, the US, the company will use advanced auto thermal gas reforming technology and employ CCS to produce low-carbon hydrogen for conversion to methanol.

The facility will produce around 3.6 million tonnes per year of methanol, with the company then working with a third party to capture and sequester about one million tonnes of CO2 each year to reduce the carbon intensity of the hydrogen, for synthesis into low-carbon intensity methanol.

Currently undergoing a front-end engineering design (FEED) study, both the final investment decision and start of construction are expected later this year, with commercial operations anticipated for late 2027.

LCM President, Don Maley, explained that the project will deliver “substantial tangible economic benefits to local communities,” whilst also providing an “environmentally beneficial blue methanol product to facilitate the transition to low-carbon chemicals and fuels.”

Maley added, “We believe that Lake Charles is a fantastic location for this project and we look forward to working with all stakeholders to bring it to fruition.”

To secure the Louisiana project, LED offered a competitive incentive package that includes the comprehensive workforce development solutions of LED FastStart. This will offer a Performance-Based Grant of $5m to be used for reimbursement of company expenditures for infrastructure needs.

The company will also participate in Louisiana’s Industrial Tax Exemption and Quality Jobs programmes.

The project is expected to generate 123 direct new jobs in Calcasieu Parish, with an estimated average annual salary of $135,955. There will be 605 indirect new jobs created and more than 2,300 construction jobs at its peak.

Governor Jeff Landry said, “This expansion would bring billions of dollars, hundreds of permanent high-paying jobs and thousands of construction jobs, providing a tremendous boost to the economy of the southwest region.”

Elsewhere in the US, Shell Catalysts & Technologies was recently awarded a contract to deliver a Shell Blue Hydrogen Process license agreement to a project in Ohio, developed by Trillium H2 Power.

Analysis: Why blue hydrogen prevailed in the battle for the 2020s

After all the peaks and troughs of interest in hydrogen as a potential climate solution over recent decades, the 2020s have delivered a sharper focus on the energy carrier’s potential.

With a growing number of national strategies, billions-of-dollars’ worth of subsidies are now being thrown at boosting production, and increasingly stringent carbon policies are encouraging hydrogen’s uptake.

And while much of that energy, momentum and money has gone into green hydrogen, to the delight of some and the dismay of others, blue hydrogen’s role continues to endure as economies attempt to drive towards a green-tinted future.