28 August 2001 22:45 [Source: ICIS news]
HOUSTON (CNI)--Canada's Methanex said Tuesday it and joint venture partner BP will proceed with construction of the 1.7m tonne/year Atlas methanol plant on Trinidad with production expected by early 2004.
But Vancouver, British Columbia-based Methanex also announced today it is mothballing its 470 000 tonne/year methanol plant at Medicine Hat, Alberta, saying the plant is being shut down indefinitely and its 95 employees will be let go or relocated to other Methanex facilities.
Methanex said the $400m (Euro444m) Atlas methanol project will be sited next to the Titan plant on Trinidad in which Methanex has a 10% interest.
BP will hold a 36.9% share of the new Atlas facility, Methanex said, while it will retain a majority 63.1% share. Methanex will market all of the Atlas facility's output, of which some 50% will be committed for sale under long-term contracts to Methanex, BP and Air Products.
Pierre Choquette, president and chief executive of Methanex, said in a statement: "Atlas, with its very low capital and operating costs, will provide us with another outstanding production hub. Atlas is strategically located with abundant natural gas reserves and duty-free access to both the US and Europe."
In mothballing the Medicine Hat plant, Methanex said the facility's non-competitive cost structure required that the plant, shuttered on 1 July this year, be kept off-line for an indefinite period.
The company said it expects to realise some $10m in savings from annual fixed and capital maintenance costs related to the plant closure. Customers formerly served by the Medicine Hat plant will continue to be supplied by Methanex from other locations, the company said.
The company's statement said it will take a one-time charge of some $11m in the third quarter, primarily for employee severance costs and expenses in mothballing the facility.
Methanex is the world's largest producer and marketer of methanol.
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