08 December 2011 20:40 [Source: ICIS news]
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HOUSTON (ICIS)-- LyondellBasell plans to restart a methanol unit in Texas near Houston in late 2013, the company’s top executive said on Thursday.
Chief executive Jim Gallogly said that LyondellBasell would restart the 780,000 tonne/year unit at Channelview to take advantage of low-cost natural gas supplies.
Channelview is eight miles east of downtown Houston.
The Texas plant will restart in late 2013 and generate $130m-150m/year (€98m-113m/year) in annual earnings before interest, taxes depreciation and amortisation (EBITDA), said Pat Quarles, senior vice president at LyondellBasell.
Quarles and Gallogly spoke at LyondellBasell’s Investor Day event in New York.
In October, methanol sources said LyondellBasell was trying to sell the plant. Company spokesman David Harpole said the producer had explored “ various options” for the unit before deciding to restart it.
LyondellBasell closed the methanol unit in March 2003 because of the then-high cost of natural gas, the main feedstock for North American methanol producers.
US natural gas prices jumped above $15/MMBtu by the end of 2005, according to the US Energy Information Administration (EIA).
But natural gas prices have dropped considerably in the US and Canada since then, trading on Thursday around $3.55/MMBtu.
Lower natural gas prices in North America have prompted the restart of at least two North American plants at a fraction of the cost of building new units.
Methanex reopened a mothballed methanol plant in Medicine Hat, Alberta, earlier this year at a cost of $40m (€30m).
By comparison, a methanol plant in Damietta, Egypt, which is 60% owned by Methanex, cost over $800m to build.
Another closed plant, in Beaumont, Texas, was purchased in May for $65m and is now owned solely by Egypt-based OCI Nitrogen.
LyondellBasell did not say how much it would spend in restarting the Texas unit. The company said its plans to spend $1.3bn-1.5b on seven projects over the next few years, which include the Texas methanol restart.
($1 = €0.75)
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