BATON ROUGE, La.—Wanhua Industrial Group has selected Louisiana for a $1.2 billion MDI project, according to Louisiana Gov. John Bel Edwards.

Edwards announced the project along with Wanhua Chemical Chairman and CEO Zengtai Liao on April 10. The agreement will see a $954 million capital investment by Wanhua with a further $166 million investment by project partners.

Louisiana Economic Development noted that the state was a perfect fit for the chemical company because it offers "immediate access to an abundant supply of natural gas and other feedstocks, along with deep water transportation by the Mississippi River."

Louisiana Economic Development also noted that the state provided Wanhua with a "competitive incentive package that included a grant of $4.3 million to offset site infrastructure costs." Additionally, LED anticipates Wanhua will take advantage of the state's quality jobs and industrial tax exemptions.

The project is expected to create 170 new direct jobs and will be the second largest foreign direct investment in Louisiana by a China-based company. The largest is a $1.85 billion project being undertaken by Yuhuang chemical.

Wanhua has not yet chosen a specific site within the state for the project.

The firm has been planning to build an MDI splitter on the Gulf Coast since 2014. In 2015, the company said it was considering a 400 kT/year MDI facility in the same region.