(The Center Square) – Lafayette-based Southern Energy Renewables has signed a letter of intent to supply green methanol to global shipping company Hapag-Lloyd, a development that could help anchor a planned $1.4 billion clean fuels refinery in St. Charles Parish.
The Killona facility would convert regional wood waste and forest residues into low-carbon fuels, including about 220,000 tons of maritime methanol and 28 million gallons of sustainable aviation fuel annually. The project could also provide a new market for Louisiana’s forestry sector, which has struggled since major paper mill closures in West Monroe, DeRidder and Bogalusa since 2020.
The agreement with Hapag-Lloyd serves as a critical indicator of project viability for state officials weighing a request for $402.5 million in low-interest, tax-exempt financing. While the Louisiana Community Development Authority authorized the revenue bonds in December 2025, the project still requires final approval from the State Bond Commission to tap into its limited annual capacity for such financing.
As planned, the biofuels plant at a site at St. Charles Intermodal along the Mississippi River would produce approximately 220,000 tons of methanol for maritime use annually along with about 28 million gallons of sustainable aviation fuel (SAF). The site’s proximity to Louisiana’s river logistics and hydrogen supplies—a key ingredient in making green fuels— would allow the facility to leverage established supply chains.
Southern Energy Renewables, which was recently purchased by Houston-based XCF Global Capital, said it expects the plant will employ 120 workers at an average annual salary of more than $97,000. Louisiana Economic Development estimates the project will generate an additional 394 indirect jobs across the region.
“We welcome the continued progress of Southern Energy Renewables’ project in St. Charles Parish and the announcement of this new agreement,” said Parish President Matthew Jewell. “St. Charles Parish has long been a leader in energy and manufacturing, and we are well positioned to support projects that strengthen our economy, build on our industrial base, and advance alternative energy development.”
The project marks a new industrial chapter for Killona, a community that has evolved from plantation-era sugar and early 20th-century petrochemicals plants into a modern energy hub anchored by the Waterford nuclear station.
Construction on the Killona facility is scheduled to begin in late 2027, with full-scale operations and fuel deliveries to Hapag-Lloyd anticipated to begin in late 2029. Southern Energy Renewables expects to reach a final investment decision on the project in early-to-mid 2027.
To meet its green goals, Hapag-Lloyd has ordered 18 new container ships and is retrofitting five existing vessels with ‘dual-fuel’ engines capable of running on methanol. These ships, some large enough to carry 15,000 containers, are set to begin hitting the water between 2026 and 2028.
Jan Christensen, director of Global Fuel Purchasing at Hapag-Lloyd, said green methanol is an important component of the firm’s long-term energy plan. “Green methanol represents a key pathway within Hapag-Lloyd’s multi-fuel strategy, underscoring our commitment to advancing more sustainable shipping solutions. This initiative with Southern Energy Renewables Inc. is seen as a valued step towards achieving net-zero fleet operations at Hapag-Lloyd AG by 2045,” said Christensen.
Louisiana Economic Development has offered a $1 million performance-based grant and various tax exemptions to the project’s developers.
