Valero refinery in St. Charles plans major expansion

07 17, 2013 by The Times-Picayune

Valero Refinery is currently in the planning stages of a massive $700 million expansion to its St. Charles Parish plant, which occupies roughly 1,000 acres along the Mississippi River in Norco. The expansion will include construction of a large methanol unit, designed to compress natural gas into liquid in order to manufacture chemicals and plastics.

Construction is expected to begin sometime in late 2015 or early 2016, according to Valero Community Relations Director Taryn Rogers. Rogers said Valero selected St. Charles for the expansion due to its proximity to the Mississippi River and its docks, as well as "the pro-business environment in Louisiana."

The project, Rogers said, is the result of low natural gas prices, and will create at least 100 construction jobs, and more than two dozen permanent jobs at the plant.

St. Charles Parish Assessor Tab Troxler said the plant expansion will have a profound effect on the parish's lucrative tax rolls. In 2012, Valero paid roughly $12 million in property taxes in St. Charles Parish. Troxler said the expansion could pour another $3 million - $5 million into the tax base.

"I think a lot of people don't realize just how important industries are from a tax standpoint, to our local economy and our taxing districts," Troxler said. "Eighty eight percent of all property tax paid in st. Charles Parish is from industry."

The total tax roll in St. Charles Parish is roughly $131 million and $115.3 million comes from industry, including Valero, Monsanto, Motiva and Entergy, among others.

"We're always pleased that there are expansions," Troxler said. "It says we are in a good business climate, not only in the parish but in the state. The market is strong, and people are looking to invest here in St. Charles Parish. That's a real positive."

Valero's Vice President of Communications Bill Day said that although the expansion is in the works, it is far from a done deal.

"We still need to get our necessary permits," Day said. "This project is not finalized or scheduled yet."

Day said that Valero has been toying with the idea of building a methanol unit for several years, due to the falling price of natural gas. Additionally, because Valero's largest expansion to date - a $1.4 billion hydrocracker that was completed in 2010 - increased the facility's hydrogen production capacity, making methanol using the excess hydrogen seemed like a no brainer.

"Since the resurgence in the production of natural gas here in the United States and the dramatic fall in price, it has opened up opportunities for petrochemicals and other manufacturing because it's made energy use so much less expensive than it was," Day said. "We believe it'll stay at low prices for the foreseeable future, and that has reopened the chance to do projects like this. We think it's going to be successful."