22 August 2012 20:49 [Source: ICIS news]
HOUSTON (ICIS)--US methanol spot prices have shot up 4 cents/gal in the past week because of production issues in Trinidad and Texas, market sources said on Wednesday.
The major issues are in Trinidad, where Methanol Holdings (Trinidad) Limited (MHTL) has scheduled a combined 25 days of maintenance on two methanol plants in September, according to market sources.
MHTL’s 580,000 tonne/year M4 unit will go down for 15 days beginning on 1 September, followed by the 1.9m tonne/year M5000 unit for 10 days, sources said.
The September work at the Trinidad plants is regularly scheduled maintenance, the sources said. In 2011, the M5000 plant had a six-week turnaround that began in early October and finished in late November.
The M5000 unit went down in early April for a maintenance turnaround that lasted about a month.
The Trinidad turnarounds coincide with a natural gas curtailment in September, imposed by the state-owned National Gas. The company told chemical producers in June that gas deliveries will likely be curtailed by up to 30% during September.
Natural gas cutbacks have become routine over the past 18 months in the Caribbean island, which supplies 65-70% of US methanol imports in any given month.
Repair work being done on offshore platforms has prompted numerous gas curtailments in Trinidad since late 2010, which have reduced methanol, ammonia and other chemical production.
Methanol production in Trinidad dropped 11% in the first five months this year, compared with the same period of 2011, according to the country’s Central Bank. Natural gas production in Trinidad declined 4% in the same period.
Trinidad’s natural gas supply problems have also been significant enough to cast doubt on a huge gas-to-chemicals project proposed by SABIC and Sinopec.
In July, industry sources said the project appeared to be in doubt as talks over a natural gas contract faltered, according to industry sources. The proposed project in Point Lisas would require 225m cubic feet/day of natural gas.
Another factor pushing spot prices up are production glitches at a restarted methanol plant in Beaumont, Texas, sources said.
The low in spot prices came last week on a brief dip to 107 cents/gal. The high, 111 cents/gal on Wednesday, came with a barge purchased for first half of October delivery.
The Beaumont plant, owned by a subsidiary of OCI, restarted on 4 July.
MHTL operates the M5000 unit and four others at the Point Lisas Industrial Estate in Trinidad that give it a total combined capacity of 4m tonnes/year.
Southern Chemical Corp (SCC) is the North American marketer for MHTL.
($1 = €0.80)
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