Updated: Louisiana Still Backs Project Planned By Russia’s EuroChem

Back in July 2013, the Russian fertilizer maker EuroChem, in a joint press release with Louisiana governor Bobby Jindal, announced it was planning to build a $1.5 billion ammonia and urea complex in Louisiana.

At the time, the announcement was just one in a long line of chemical and fertilizer projects meant to take advantage of shale. The project seemed plausible enough. There have been plenty of foreign companies planning large U.S. projects–for example, South Africa’s Sasol, which is working on an ethylene cracker and gas-to-liquids plants in Louisiana.

At the time of the announcement, EuroChem had just completed its purchase of BASF’s European fertilizer business. Certainly, like Braskem and SABIC before it, EuroChem is one of those companies outgrowing the cradle of its home market.

Louisiana offered good incentives to EuroChem. It sold a tract in Iberville Parish to the company for $12 million. In the original announcement, the state also said it would give EuroChem an $8 million grant as well as other incentives.

So what has happened since the announcement?

Russia has annexed Crimea. And Vladimir Putin appears ready and willing to salami slice more of Ukraine. (We’ll see if the agreement between Russia and the U.S. to deescalate matters will, in the long run, be a turning point or merely an intermission.)

Will the State of Louisiana still support the project under such circumstances? Would EuroChem still want to go through with it?

Sasol, we should remember, divested from a complex in Iran when protests over it seemed to jeopardize its Louisiana projects. It isn’t outrageous to suppose that the EuroChem plant might be one of Russia’s costs of taking over parts of a sovereign nation.

I put the question to both the State of Louisiana and EuroChem. EuroChem didn’t get back to me. I am not surprised.

Louisiana Economic Development, the state agency that promotes investment, did comment with a quote attributable to Stephen Moret, Secretary of Economic Development, State of Louisiana:

“LED remains in full support of the project.”

Not exactly William Henry Harrison’s inauguration speech, but it gets the job done.

It might also be the smartest answer. Foreign policy is the responsibility of the Federal government, not a state’s. And should a state decide to pull support for an investment because it didn’t like the foreign policy of a company’s home country, it would send the message that the state conducts its business arbitrarily. That could have a chilling effect on investments from China, Saudi Arabia, and any other country that could one day butt heads with the U.S. government or run afoul of American populist sentiment.

UPDATE:

Eurochem has responded, and they don’t seem inclined to back off either:

“EuroChem remains fully committed to establishing a presence in Louisiana,” a spokesperson tells The Chemical Notebook.

Author: Alex Tullo

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