AFPM '12: Trinidad in limelight in North American methanol market

01 April 2012 16:51  [Source: ICIS news]

The flag of TrinidadHOUSTON (ICIS)--This might be the year of Trinidad in the North American methanol market, as government officials of the Caribbean island consider a proposal for a $5.3bn project, which would probably be the largest foreign investment ever in the country.

The methanol-to-olefins and methanol-to-petrochemicals plants at Point Lisas are proposed by Saudi Basic Industries Corp (SABIC) and China’s state-owned Sinopec.

If approved, the SABIC/Sinopec project would forge an even stronger link between Trinidad and the petrochemical industry, which pays roughly half of all corporation tax collected by the government, according to the Energy Chamber of Trinidad and Tobago.

The project would also give a needed boost to the island’s petrochemical complex, a US methanol source said.

“Keep in mind that Trinidad has not had a project start-up since 2007,” the source said. “They’re desperate to get a project going.”

The SABIC/Sinopec project would also mark a major shift in Trinidad’s methanol industry, which comprises seven existing plants with a total capacity of 6.6m tonnes/year. Much of the material is shipped to downstream producers in the US.

That shift, described earlier this year by Trinidad energy minister, Kevin Ramnarine, would be to make something with methanol and not just export it. About 70% of US methanol imports come from Trinidad.

The SABIC/Sinopec project would produce methanol and turn it into other downstream derivatives – petrochemicals like acetic acid, or olefins, such as ethylene and propylene.

A US market source said Trinidad no longer just wants to make and sell methanol or ammonia, which are the two major petrochemicals produced at the Point Lisas complex.

“There’s more value creation by going downstream,” the source said.

Trinidad’s Energy Ministry and other government departments are currently negotiating with SABIC/Sinopec on the project. Ramnarine said in February that negotiations would take three months to complete.

The project has touched off a political debate in Trinidad over talk of government subsidies on the price of natural gas needed by the proposed plants.

Companies that submitted bids for the Trinidad methanol project were said to have sought discounts of 36-53% on gas prices, according to Ramnarine.

But he said in late March that the proposed SABIC project would receive no government subsidies.

Hosted by American Fuel and Petrochemical Manufacturers (AFPM), the International Petrochemicals Conference (IPC) continues through Tuesday in San Antonio, Texas.

By: Lane Kelley
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