Taiwanese giant Formosa Petrochemical Corp. expects its proposed St. James Parish complex could cost more than the $9.4 billion it projected — due to coronavirus pandemic-related delays and construction materials price hikes that a global credit rating agency already says could push the cost toward $12 billion. If the rating agency’s estimate proves correct, that would be a nearly 28% hike in the overall project cost. The estimated cost to build an ethylene project along the U.S. Gulf Coast was projected to increase by 2.7% in 2019 and 3.1% in 2020, according to Compass International. However, that was before the coronavirus pandemic began and impacted construction materials and prompted delays. Formosa, the parent company of privately-held Louisiana-based FG LA LLC, began studying the feasibility of the petrochemical complex in 2015. “The difficulty of evaluating construction costs is attributable to skyrocketing costs stemming from uncertainties related to the pandemic, which attributed to FG’s (Formosa’s) deferral of major construction until the pandemic has subsided and/or vaccine has proven working,” Ky Lin, CEO of FG LA LLC, said in a statement. “FG is monitoring all relevant factors closely, and may adjust the total projected Sunshine Project cost when the uncertainties can be resolved accordingly… Read full this story
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