BASF presses ahead with $780m Geismar MDI expansion phase

LONDON (ICIS)–BASF is moving forward with a $780m capacity expansion at its Geismar, Louisiana, methylene diphenyl diisocycanate (MDI) plant, with annual capacity expected to reach 600,000 tonnes/year by the middle of the decade, the Germany-headquartered firm said on Tuesday.

Running from 2022 to 2025, the project is the third phase of BASF’s development of new MDI capacity at Geismar since 2018, with the cost of the final stage of work estimated at $780m.

Completed in December 2020, the first phase of the work involved taking an older MDI synthesis unit out of service at the site and building a new one, with capacity at Geismar standing at 300,000 tonnes at that stage in the process.

The second phase, which increased MDI capacity at the site by a third, was completed in December 2021. The final phase will also involve the development of several new upstream units.

“As one of BASF’s Verbund sites, the Geismar location is ideally suited for the expansion of our MDI production thanks to its existing infrastructure, reliable raw material supply, skilled workforce and strong community support,” said BASF Corporation chief Michael Heinz.

The investment is the latest in significant new isocyanates capacity in the country by one of the US’ key producers, which also include Covestro, Dow and Huntsman.

“With this integrated facility, we will continue to support our North American MDI customers by growing our capacity to meet their needs,” said BASF Monomers president Ramkumar Dhruvva.

Huntsman announced last week that it has begun commercial operations of its new MDI splitter, also located in Geismar. The $180m unit allows the company to produce more differentiated grades of MDI at the site.

Covestro, which has long planned a new flagship MDI unit, announced in 2020 that it would be delaying the project and potentially choosing a different site to the Baytown, Texas, plant that had provisionally been earmarked for the work.

High building and engineering costs in the US mean that China is also under consideration, with a decision expected this quarter, according to company CEO Markus Steilemann.

Covestro has projected that demand in the MDI space will outstrip supply as large-scale new capacities come onstream over the next few years.

Thumbnail picture: Work on BASF’s MDI facilities at Geismar, Louisiana (Source: BASF)