09-23-13 Meeting of the La Porte Development Corporation Board of Directors

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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:23 September2013 Source of Funds:4B Board Requested By:Scott D. Livingston Account Number: 038 Department: Administration/Economic Development Amount Budgeted:$1,000,000 Report: Resolution:Ordinance: Amount Requested: $1,000,000 Exhibits: INEOS Project PowerPoint Presentation Budgeted Item:YESNO Exhibits: INEOS Incentive Agreement (Signed by INEOS) SUMMARY & RECOMMENDATION INEOS is a global manufacturer of petrochemicals and specialty chemicals. It comprises 15 businesses,each with a major chemical company heritage. Its production network spans 51 manufacturing facilities in 11 countries throughout the world with 15,000 employees. Annual revenue for the INEOS Group is more than $30 billion with about 40 million metric tons of production capacity. INEOS,USA is considering building two large chemical projects:(1) an Ethylene Oxide/Ethylene Glycol (EO/EG) plant,and (2) a High-Density Polyethylene (HDPE) plant at the company’s Battleground Manufacturing Complex in La Porte. The company is considering the La Porte Battleground site, as well as Chocolate Bayou and Plaquemine, Louisiana. The EO/EG project is being planned as a world scale 550,000 tons per year EO plant, along with appropriately sized Ethylene Glycol (EG) units, will advance INEOS’ strategy to grow its business over the next few years based on advantaged U.S. shale gas economics. The new EO/EOD plant is expected to start up in 2017, producing purified Ethylene Oxide, Mono-, Di-, and Tri-Ethylene Glycol. The EO/EG plant is expected to cost approximately $750 million and will create up to 60 new, high-paying jobs with an average salary of $65,000 or more. The HDPE project is expected to produce 450,000 tons per year of high-density polyethylene, rd increasing INEOS’ position as the 3largest North American producer of high density polyethylene and polypropylene. Construction on the HDPE facility is planned to start in 2014 and is expected to be operational in 2015. The project investment is approximately $250 million and will add 24 new, high-paying jobs with an average wage of $65,000 or more. At the La Porte site these projects can take advantage of access to the region’s raw material connections and logistics capabilities to the Houston ship channel. However, in order to fully meet the needs of the company the site requires significant infrastructure enhancements, in the form of road and drainage improvements. These improvements are expected to cost over $8 million.