08 February 2012 23:28 [Source: ICIS news]
HOUSTON (ICIS)--Saudia Arabia's SABIC is pushing for approval to build a $5.3bn (€4.0bn) methanol complex in Trinidad and Tobago, sources said on Wednesday.
A US market source said SABIC wanted a Trinidad government subsidy of 85 cents/MMBtu for natural gas to supply the project, which made its bid “a long shot”.
That works out to roughly 35% of Wednesday’s closing US Henry Hub natural gas price of $2.44/MMBtu.
“It will be looked at, but it’s not viable,” the source said of SABIC’s bid.
Reports in a Trinidad newspaper this week outlined the deal, which would allow SABIC to build a methanol-to-petrochemicals and methanol-to-olefins complex at the Point Lisas Industrial Estate.
The project’s daily natural gas requirement would be 265 million cubic feet, according to the Trinidad Guardian.
SABIC wants a gas contract priced 36% cheaper than what the state-owned National Gas Company (NGC) pays for natural gas from its suppliers, according to a report on Monday in the Guardian.
Trinidad energy minister Kevin Ramnarine said that SABIC’s bid for the gas was not final, according to the newspaper. Cabinet members debated various facets of the project, including the gas issue, the newspaper said.
Ramnarine and other officials in the energy ministry could not be reached immediately on Wednesday.
SABIC spokeswoman Jodi Kennedy Gaffey did not reply to emails asking about the company’s plans in Trinidad.
A news report by Bloomberg on Wednesday quoted SABIC CFO Mutlaq al-Morished as saying that the company was in talks over a potential methanol plant venture in Trinidad.
Trinidad government officials did not return calls immediately.
Natural gas supplies in Trinidad have been a constant worry for downstream producers over the past year, with curtailments extending for months at a time to downstream producers of 10–30%, depending on the month.
Trinidad supplies roughly 70% of the US’s methanol imports, according to data from the US International Trade Commission.
Methanol is an essential ingredient in formaldehyde, used in plywood and other building materials. It is also used in antifreeze, windshield wiper, brake and drilling fluids.
($1 = €0.75)
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