27 October 2011 21:44 [Source: ICIS news]
HOUSTON (ICIS)--Methanex is “pretty comfortable” about relocating an under-utilised plant in Chile to the US Gulf coast, the chief executive said on Thursday.
The company is “working on a project to relocate our plant to the US Gulf”, with the main attraction being the region’s low natural gas prices, Methanex chief executive Bruce Aitken said.
“All of the analysis we’ve done would suggest that natural gas prices in that part of the world are going to be relatively soft compared to liquid prices,” Aitken said of the Texas-Louisiana area. “So we feel pretty comfortable about relocation.”
Aitken said the company would make a decision by mid 2012.
“We are talking to a number of people about gas contracts, which are not particularly common in the US, and we hope we’re successful with that,” Aitken said. “But even if we’re not, we’re not particularly put off by the absence of a contract.”
Another Methanex executive, John Floren, said in June that shale discoveries would make it possible to operate a methanol plant in the US profitably even if natural gas prices rose to $7/MMBtu – or double current prices, which are around $3.50/MMBtu.
Methanex’s latest earnings report repeated what the company has said previously about declining natgas supplies for its Cabo Negro complex in Chile, which has four plants with a combined capacity of 3.8m tonnes/year.
Only one plant is running, though, producing 116,000/tonnes in the third quarter, Methanex said. The earnings report said relocating the plant was an option, as was using coal gasification to provide feedstock.
Aitken cited other plans for expansion, a major one being the purchase of BP’s stake in the 1.7m tonnes/year Atlas plant in Trinidad that is co-owned by Methanex.
BP said in late September that it wanted to sell its stake in the plant. Aitken would not comment when asked about the value of BP’s share, which a New York research firm estimated to be worth $125m-175m. However, Aitken stressed that the deal was a top priority.
“It would be one that we’re very keen to do,” Aitken said. “I think you can assume if we buy this, it will be a good deal.”
Aitken said Methanex should be able to fund its expansion plans with cash on hand.
The company reported this week that third-quarter earnings doubled year on year to $62.3m (€44.9m) on stronger demand and higher pricing, the Canadian methanol producer said on Wednesday.
($1 = €0.72)
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