Methanol plant construction costs double

10 May 2007 09:26  [Source: ICIS news]

SINGAPORE (ICIS news)--Capital costs for a 1m tonne/year methanol plant have almost doubled to $600m raising the financial bar for producers to make a reasonable profit, warned a US-based methanol consultancy Thursday.

"Approximately, five years ago a 1m tonne/year plant would have been built somewhere in the range of $340m," said Jim Jordan, president of Jim Jordan and associates at the International Methanol Producers and Consumers Association Asian methanol conference in Singapore.

"This is not good news for consumers because when capital costs go up, prices go up," he said.

The estimate given to producers now for a 1m tonne/year plant is closer to $600m and possible higher said Jordan.

Rampant construction in the Middle East and China has caused raw material prices to escalate and has strained human resources to bursting point.

Some senior engineers have also warned the petrochemical industry faces cost increases because of a shortage of skilled workers.

By: Matt Kovac
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