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Formosa Plastics postpones construction on its Sunshine petrochemicals project in Louisiana

10/20/2020

Formosa Plastics subsidiary FG LA LLC recently announced that it has chosen to defer the primary construction at the two-phase Sunshine petrochemicals project in St. James Parish, Louisiana. The negative effects on the industry caused by COVID-19 was named as the cause for delay.

FG LA Director of Community and Government Relations, Janile Parks, stated that “The widespread impacts of a global pandemic, including the challenge it creates in evaluating construction costs and the restrictions it has placed on international travel, are being felt across all industries and businesses, including FG,” and that “As a result, FG has deferred major construction until the pandemic has subsided and/or an effective vaccine is widely available.”

The Sunshine project was initially envisioned as an ambitious, $9.4 billion, two-phase project for Formosa. Phase one includes a 1.2 million tons per year ethane cracker, a 400,000 tons per year linear low density polyethylene (LLDPE) unit, a 400,000 tons per year high density PE (HDPE) unit, an 800,000 tons per year ethylene glycol (EG) plant, a 600,000 tons per year propane dehydrogenation (PDH) unit, and a 600,000 tons per year polypropylene (PP) plant rounding out the initial phase due for a 2024 startup. The second phase was designed to add another 1.2 million tons per year ethane cracker, another 400,000 tons per year HDPE unit, an additional 400,000 tons per year LLDPE plant, and finally, a supplementary 800,000 tons per year EG plant anticipated during 2029.

Formosa is planning to continue planned works onsite such as physical land work, as all environmental permits are reportedly in place. Gulf Energy Construction Boxscore analysts have placed this project on hold until more information is made available.