Price and market trends: Methanex may move second plant from Chile to the US

01 October 2012 10:35  [Source: ICB]

Canada-based Methanex should decide by the second quarter of next year on whether it will move a second methanol plant from Chile to the US. If Methanex does decide to move the second plant to the US, it would be the latest among a growing number of methanol plants that are being moved, restarted or built in the country.

Methanex plans to disassemble a 1m tonne/year idled methanol plant at its Cabo Negro complex in Chile and to move the facility to Louisiana to capitalise on low US natural gas prices.

Methanex has four methanol plants at Cabo Negro. But because of problems with natural gas supplies, the company is just running one of the four plants. Once Methanex completes the move to the US, its relocated methanol plant will actually have plenty of natural gas.


In fact, the company is seeking a 10-year natural gas contract for the methanol plant it is moving from Chile to Louisiana, said Tim Williams, Methanex's vice president, upstream and feedstock acquisition. Williams made his comments during the World Shale Oil and Gas Conference, held by The CWC Group.

The contract will be for 100m cubic feet/day (2.8m cubic metres/day), he said. Instead of being based on NYMEX gas prices, the contract will set a base price for natural gas, plus a revenue-sharing provision based on the price of methanol, Williams said. Such terms would protect the natural gas supplier from low fuel prices and Methanex from high prices, he added.

Methanex is not the only methanol producer attracted to US supplies of natural gas. Orascom Construction Industries (OCI) restarted a Texas plant in Beaumont in July this year. Celanese is building a 1.3m tonne/year methanol plant at Clear Lake near Houston, a project valued at $500m-1bn.

LyondellBasell plans to restart a 780,000 tonnes/year unit in Channelview in the second half of 2013. The project should cost $150m. In Canada, Methanex has restarted a methanol plant in Medicine Hat.

If all of the methanol projects go through, they could displace much of the methanol the US buys from Trinidad & Tobago. The island makes up 60-70% of all US imports of methanol.

  • Additional reporting by Lane Kelley in Houston

By: Al Greenwood
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