NPRA '11: Year of the restart in North American methanol

27 March 2011 19:00  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--This is the year of the restart in North American methanol activity, with two mothballed plants - one in Canada, the other in the US - scheduled to start back up in the second and third quarters.

April will bring a homecoming of sorts for Methanex, the world’s largest producer, which is based in Canada but has not made any methanol there for years.

Natural gas prices that soared above $10/MMBtu in late 2005 led the company to shutter its Canadian units and import methanol to its home country.

The change came in September 2010, when Methanex said that gas prices had dropped low enough to restart its plant in Medicine Hat, Alberta - idled since 2001 - at a cost of $40m (€28m)... Methanex CEO Bruce Aitken said the company obtained enough gas in Alberta to fuel the plant through October 2012. Methanex has two units at Medicine Hat, and it will restart the one with 470,000 tonnes/year capacity, with daily gas usage of 50,000/MMBtu.

The other North American plant on tap to restart is in Texas, Eastman Chemical’s Beaumont unit that has been mothballed since 2004.

Deo Van Wijk, a former Methanex executive and well-known methanol entrepreneur, obtained Swiss backing for his plans, which also hinge on relatively cheap North American natural gas prices.

For an idea of how far values have fallen, when the Beaumont plant closed in December 2004, natural gas prices were around $6/MMBtu.

Van Wijk’s plan calls for starting the 255,000 tonnes/year ammonia side first, because of a recent jump in ammonia prices. He still believes the 850,000 tonnes/year methanol plant in Beaumont will be in production for consumers by July or August, though he said it could be delayed. “The ammonia will pay for the rest,” Van Wijk said.

Van Wijk would not say how much he and Janus Methanol are spending to purchase the Texas plant, but he did say it was less than what Methanex is spending to restart the Alberta site.

Van Wijk said relatively cheap gas in the US and current high contract methanol prices were the big drivers behind acquiring the Beaumont plant. He predicted more foreign investment in US methanol projects this year.

"You will see more production in the US soon,” Van Wijk said.

Hosted by the National Petrochemical & Refiners Association (NPRA) the International Petrochemicals Conference (IPC), continues through Tuesday.

For more on methanol, visit ICIS chemical intelligence
By: Lane Kelley
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