What is the Lake Charles Methanol II Project?

Lake Charles Methanol II is a $5 billion Clean Hydrogen project that will use advanced technology, including carbon capture and sequestration, to reform natural gas into low-carbon hydrogen for conversion into Blue Methanol, which will serve as the hydrogen carrier fuel.

What is the status of the Project?

LCM has a site optioned and largely prepared adjacent to the Port of Lake Charles and has commenced critical engineering work. LCM is applying for a Loan Guarantee with the U.S. Department of Energy for the Project’s debt financing. Morgan Stanley is managing the equity process for the Project, and the Project has a commitment for the funding required to complete its development. The Project expects to reach financial close and construction start in 2025.

What technology will the Project use?

The Project will use auto-thermal reforming technology to produce hydrogen from natural gas. The hydrogen will be converted into Blue Methanol using methanol synthesis technology that includes the efficient capture of carbon dioxide. The process will incorporate hydrogen recycling for use as a fuel to lower its carbon content and optimize the production of Clean Hydrogen.

What are the economic and other benefits of the Project?

The Project will create new U.S. manufacturing and construction jobs. It will represent a major investment in clean energy infrastructure in Louisiana and the advancement of large-scale carbon capture and sequestration in the U.S. The Project will create high-paying jobs, produce a low-carbon hydrogen carrier fuel, and help bolster the U.S. move towards decarbonization. The Project has developed a detailed Community Benefits Plan to ensure positive engagement with the surrounding community and foster job training and opportunities for residents.

What is methanol used for?

Methanol can serve as an important hydrogen carrier that is used around the world to produce many products that improve our daily lives. It is used to produce plastics, coatings, automotive electronics, foam materials, inks, paint, adhesives, caulk, rubber tires, and many other vital products. It also can be blended with gasoline to fuel vehicles or used to create biodiesel fuel. Because it is such a useful feedstock, methanol demand is projected to grow for the foreseeable future. Currently, much of the methanol used in the U.S. is imported; the LCM project will help reduce these imports.

Who will operate the Project?

Once built, the Project has a highly qualified operations and maintenance (“O&M”) team that will work with LCM’s EPC contractor to start and commission the facility and then will manage operations of the facility long-term. The core O&M team has a track record of success starting up and operating similar facilities around the U.S. They were integral in relocating, rebuilding, and commissioning the Coffeyville gasification and ammonia plant and operated it successfully for eight years.

What happens with the Project’s CO2?

As part of its methanol synthesis process, the Project will capture a concentrated stream of CO2. That stream of CO2 will be compressed and then put into a connector pipeline that will deliver it to a larger CO2 pipeline system operated by LCM’s sequestration services provider. Under a long-term contract, the sequestration provider will take control of the CO2, transport it to one or more sequestration sites, and inject it into deep saline aquifer formations for permanent storage.