Methanex sees '08 start-up in Egypt, plans on 1.3m tonne/yr

18 February 2005 19:25  [Source: ICIS news]

TORONTO (CNI)--Methanex’s joint venture (jv) methanol project in Egypt is planned with a 1.3m tonne/year capacity and could start up as early as 2008, according company chief executive Bruce Aitken.

 

Aitken told an investor conference here: “If we are successful with this project it could start up in 2008.”

 

Responding to analysts’ questions, Aiken added the unit would have a capacity of about 1.3m tonne/year. 

 

Aitken said that from experience with a larger 1.7m tonne/year unit in Trinidad, Methanex found that 1.3m tonne/year is “our optimum size.”

 

Aitken added that Methanex would like to develop Egypt as its third major production hub, in addition to Chile and Trinidad.

 

He noted that Egypt has “lots of natural gas”, about 65trn cubic feet of proven and probable reserves, and it has the potential to develop a petrochemicals industry.

 

Aitken did not disclose the price of gas Methanex will have to pay in Egypt, citing confidentiality, but he said: “It is very similar to the prices we pay in Trinidad and Chile.” Also, there will be “some kind of profit sharing” with the gas suppliers, he added.

 

Aitken said that Methanex has been working on the Egypt project for about six months and anticipates financial closure by end 2005, “and that’s a very aggressive schedule.”

 

He said Methanex expects to spend some $20m (Euro15.4m) on the project this year and $75m in 2006.

 

Aitken remarked that there are many barriers to developing a viable methanol project, such as guaranteeing a cheap gas price, good shipping, access to customers, and low capital cost. Also, Methanex found that the low US dollar has made construction much more expensive today, he added.

 

Vancouver, British Columbia-based Methanex had previously declined to disclose precise capacities and start-up timelines for the Egypt project.

 

Aitken addressed analysts and investors at the annual CIBC World Markets Institutional Conference in Whistler, British Columbia. The four-day event concludes Saturday.

By: Stefan Baumgarten
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