A subsidiary of China-based Shandong Yuhuang Chemical Co. Ltd. plans to build a methanol manufacturing facility in Louisiana. It’s estimated the development will create about 400 permanent jobs, Louisiana Economic Development says.

The $1.85 billion facility, to be located in St. James Parish, will be operated by Yuhuang Chemical, which wants to tap into cheap U.S. feedstock to produce chemicals. The bulk of its production will be exported to China, where the parent company will use it to manufacture downstream chemicals, but about 30 percent of the output is intended for the U.S. market. Construction work at the plant will start in 2016 and first operations are scheduled for 2018. Apart from facility jobs projected, it’s predicted 2,365 new indirect jobs in the area will be created, the LED said.

The methanol manufacturing facility is just the first stage of Yuhuang Chemical's plan for U.S.-based operations. Following construction of the Louisiana plant the company will look to bring its total methanol capacity to 3 million tons annually. At a later stage, a methanol derivatives plant will be added to the complex to produce intermediate chemicals.

According to Yuhuang Chemical CEO Charlie Yao, the methanol facility in Louisiana will be a key step in the company's efforts to enhance its presence in the global petrochemical sector.