Corrected: Eastman confirms deal to sell Texas methanol plant, Q1 close

07 January 2011 19:16  [Source: ICIS news]

Eastman confirms deal to sell Texas methanol plantCorrection: In the ICIS story headlined “Eastman confirms deal to sell Texas methanol plant, Q1 close” dated 7 January 2011, the fifth paragraph said, “Eastman's statement noted that former ExxonMobil chairman Lee Raymond was involved with Janus.” Eastman did not make this statement and the former ExxonMobil chairman was not involved with Janus. The paragraph has been removed. A corrected story follows.

HOUSTON (ICIS)--Eastman Chemical on Friday confirmed that it has an agreement to sell a mothballed Texas methanol and ammonia plant to a Swiss-based firm led by entrepreneur Deo Van Wijk, with the deal expected to close in the first quarter.

Eastman did not disclose the terms of its pact with Pandora Methanol, a subsidiary of Janus Methanol.

Van Wijk, a former Methanex executive, said on Thursday that the agreement was signed in late December. He said the plant would begin testing in April and begin consumer production by July.

The plant will have a capacity of 850,000 tonnes/year of methanol and 250,000 tonnes/year of ammonia, he said.

In a statement, Eastman said the sale includes related ammonia tank and methanol terminal assets and a methanol pipeline in Beaumont.

Janus currently is studying the feasibility of converting methanol to premium gasoline and was planning projects worldwide to make methanol, ammonia and other petrochemicals, according to Eastman.

Van Wijk said he was not considering using methanol as a gasoline blend, which is popular now in China but for environmental reasons is no longer a reasonable possibility in the US.

But Van Wijk said the new plant might consider the methanol-to-gasoline MTG process pioneered by ExxonMobil.

Eastman also said Janus is working with the German engineering and plant contracting firm Lurgi to build methanol plants worldwide with capacities of 10,000-20,000 tonnes daily at big reductions in capital costs.

Eastman had bought the plant in 2007 for a $1.6bn (€1.2bn) coal-gasification project, but called off the project in late 2009.

At that time, Eastman cited high capital requirements, the narrow difference between petroleum and natural gas prices and uncertain US energy policy.

($1 = €0.77)

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By: Lane Kelley
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