26 April 2012 21:25 [Source: ICIS news]
Methanex CEO Bruce Aitken said Trinidad cannot even provide enough gas now for existing methanol producers there, let alone find more for a $5.3bn (€0.76) project proposed by Saudi Basic Industries Corp (SABIC) and China’s state-owned Sinopec.
“So it’s hard to imagine that project gaining any traction,” Aitken said in an earnings conference call.
Methanex and other methanol and ammonia producers at the Point Lisas Industrial Estate in Trinidad have curtailed their operations by low double-digit percentages from last year because of the country’s natural gas shortage.
The curtailments also influenced the 9% drop in Trinidad’s methanol exports to the US in February.
Another methanol supplier agreed with Aitken’s opinion of the joint methanol-to-olefins (MTO) and methanol-to-petrochemicals (MTP) project, which was proposed in February.
“That project’s going nowhere,” a methanol source said on Thursday.
Trinidad’s talks with SABIC and Sinopec on the project provoked a hot political debate earlier this year in the Caribbean country’s parliament over gas subsidies being sought by the two companies. But Aitken said the tiny country’s gas supply problem would seem to undercut the project’s chances.
“The two promoters there are probably casting around the world looking for opportunities, and maybe they’ve had some undertakings from Trinidad,” Aitken said, referring to SABIC and Sinopec.
“But what we’ve experienced in Trinidad is that the country today struggles to meet all of its gas commitments.”
The island country just off the coast of Venezuela began a new bidding round this week on offshore oil and gas exploration. Aitken said the new blocks for bid were in deep water and thus would make any new natural gas finds more expensive.
Aitken said events in Trinidad in 2011 appeared to be a fair guide for what he expects there for the remainder of this year - more natural gas curtailments.
“I think it’s a reasonable expectation that this problem will extend through 2012,” Aitken said.
Aitken added that the US would seem to be a more attractive target country now for a methanol project than Trinidad, with natural gas in the US selling just above $2/MMBtu now. Front-month NYMEX futures settled at $2.03/MMBtu on Thursday.
The US natural gas price advantage is the main reason Methanex is making plans to move a methanol plant from Chile to Louisiana in 2014.
“My observation is that if you can buy gas in the US at $2, people are going to be building olefins units in North America,” Aitken said.
($1 = €0.76)
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