Houston, Texas and New York, New York – March 20, 2017.
Yuhuang Chemical, Inc. (YCI), a wholly owned subsidiary of Shandong Yuhuang Chemical Company (SYCC) announced the closing on March 15, 2017 of a US$800,000,000 project financing with a syndicate of Chinese banks led by Bank of China (BOC), New York Branch, with BOC, Shandong Branch, The Export-Import Bank of China, Shandong Branch, and the Heze Branch of Evergrowing Bank Co., Ltd., each acting as mandated lead arrangers, for the construction of its first methanol project in St. James Parish, Louisiana. The facility is the first construction project financing in favor of a U.S.-based project provided by a syndicate composed entirely of Chinese banks and is the first private-company construction project financing led by BOC in the United States. Under the leadership and vision of Mr. Wang Jinshu, SYCC’s Chairman, and Dr. Charlie Yao, YCI’s President, teams from YCI, SYCC, BOC and the other syndicate banks, legal advisors, engineering consultants, and many others has achieved a critical milestone on the journey to YCI safely building a 1.8 million metric ton per year mega world-scale methanol plant on time and on budget at its 1,300 acre greenfield site.
The company started clearing its site in preparation for piling and started the construction of the project on January 9th, 2017. The project is currently scheduled to be completed and to start distributing methanol by truck, rail, barge and ocean vessels during Q4-2019. Management expects a large portion of its production to be distributed locally with the balance exported globally, primarily to Europe and China. The project is the largest Chinese-invested greenfield project in the Mexican Gulf Coast region.
YCI is very pleased that three years ago it decided to select its site in St. James Parish, Louisiana. YCI management is grateful for all the support received by local and state government officials. The site is situated in an area known for its world class industrial infrastructure and for its easy access to natural gas, the Mississippi River, the Union Pacific Railroad System, and Highway 3127, connecting the plant to major interstate channels, fostering the efficient production and distribution of methanol.
YCI’s first-phase methanol manufacturing complex, totaling US$1,500,000,000 in total investment including ASU and infrastructure, is the first of a three-phase project and is anticipated to lead to the direct employment of at least 100 permanent employees. The plant will also create an estimated 1,000 construction jobs across southeast Louisiana during peak construction.
BOC, through the efforts of its New York and Shandong branches, is pleased to have led the financing efforts to reach this important and critical milestone in the development of Chinese private investment in the United States. “Bank of China is committed to fostering a strong partnership among United States and Chinese banks and sponsors. We look forward to continuing to support the development of large, important infrastructure projects in the United States” said Chen Xu, President and CEO of BOC, USA.
YCI was represented in its construction and financing efforts by its corporate counsel, Bradley Murchison Kelly & Shea LLC and its finance counsel Bracewell LLP. BOC and the lenders were represented by White & Case LLP and Jones Walker LLP. Nexant serves as independent engineer for the project.
About Bank of China (New York Branch) BOC is China’s most internationalized and diversified bank and covers 51 countries and regions. In 2016, Bank of China was designated as one of the “Global Systemically Important Financial Institutions”, the only financial institution from emerging economies that has been on the list for six consecutive years. As of June 2016, Bank of China USA has total assets of over $50 billion, ranking 18th among 190 foreign-funded banks and the 39th among 5238 financial institutions in the US banking industry. BOC USA specializes in corporate lending, trade services, treasury business and US dollar clearing by creating solutions for Fortune 500 companies, US homegrown enterprises and financial institutions.