Thursday, September 16, 2010

New Nucor Plant to be a Gas Customer

The big news in Louisiana today is that Nucor Corp. agreed to build a $3.4 billion iron and steel plant in St. James Parish between New Orleans and Baton Rouge.  The plant will be built in five stages, starting with an iron processing facility that uses direct iron reduction, which uses natural gas power to convert iron ore pellets into high quality direct reduced iron.

The direct iron reduction plant will be built rather than a traditional pig iron plant that uses carbon-intensive blast furnaces and coke ovens.  While Nucor would have preferred the pig iron plant, it realized that carbon legislation - that has yet to materialize - might make that process cost prohibitive.

While another industrial facility in south Louisiana is a mixed blessing (at least for those downriver of said facility), it is great to see a big new natural gas consumer on the horizon.  While I'm sure it was the state's economic incentives (approximately $125,000 per future employee) that ultimately drew Nucor to Louisiana, I'm sure knowledge of the abundance of natural gas from the nearby Haynesville Shale didn't hurt either.

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