News focus: Mitsubishi Gas Chemicals to lead Trinidad methanol project

14 December 2012 10:00  [Source: ICB]

An $850m (€663m) methanol-to-petrochemical project in Trinidad and Tobago will be built in a new industrial area and led by a group including Mitsubishi Gas Chemical, according to a statement from the government.

The project will convert methanol to di-methyl ether (DME) and be built on 50 hectares of land at the Union Industrial Estate in La Brea, according to the statement from Trinidad's energy minister Kevin Ramnarine.

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The announcement follows a similar, but much larger project announced earlier this year, in which a group led by Saudi Arabia's SABIC and China's state-owned Sinopec planned to build a facility in Trinidad.

The Mitsubishi project reflects a shift in thinking about petrochemicals in Trinidad, which has seven methanol plants with a total capacity of 6.6m tonnes/year. Those plants supply roughly 70% of US methanol imports.

But Trinidad no longer just wants to make and sell methanol or ammonia for export, partly because of the possibility that it will lose the US as a customer within the next five years.

Industry sources said Trinidad sees more value - and higher product prices - in encouraging production of methanol derivatives. The SABIC/Sinopec project will have built methanol-to-olefins (MTO) and methanol-to-petrochemicals plants at Point Lisas.

GEOGRAPHIC SHIFT

The Mitsubishi project also represents a geographic shift in Trinidad, away from the Point Lisas Industrial Estate, where most of the tiny island's petrochemical plants are located.

The government wants a second petrochemical complex at La Brea, in southwestern Trinidad, where a new port is being built.

"So it's sort of tying two things together," a source close to Trinidad's petrochemical industry said. The country's other ports are in Port of Spain and Point Lisas.

Ramnarine said the DME will be used in Trinidad as a replacement or blending stock for diesel and liquified petroleum gas (LPG). DME is being used in China and Europe now as a substitute for propane and diesel, Ramnarine said.

"It is, however, cheaper than diesel, given the fact that it is derived from natural gas as opposed to being derived from expensive crude oil," Ramnarine added.

In October, Japan-based companies Mitsubishi Gas Chemical and JGC Corporation completed a licenced DME plant commission by Germany-based chemical producer Grillo at an industrial park in Frankfurt.

"As its physical properties resemble those of liquefied petroleum gas and it is easy to transport and store, DME is attracting attention overseas as a potential alternative fuel to [LPG] and/or diesel, and also for use as fuel for boilers and automobiles," said Mitsubishi Gas Chemical and JGC in a statement in October.

"When DME is combusted, it generates neither sulphur oxides nor soot, and it can be easily produced from methanol from natural gas or coal, so expectations for DME as a clean next-generation fuel for power generation are high," the companies added.

Mitsubishi Gas Chemical developed its proprietary process to produce DME from methanol in 1965. In 2001, Mitsubishi Gas Chemical and JGC began developing process technology that could drastically scale up production capacity to 1.5m tonnes/year, according to the companies.

MEG, AN PRODUCTION

The second phase of the Trinidad project calls for Mitsubishi to produce monoethylene glycol (MEG) and acrylonitrile (AN) at the plant.

Mitsubishi has signed a deal to buy ethane from Phoenix Park Gas Processors.

Ramnarine said the targeted start date for the overall project is the first quarter of 2014, although it might be moved forward to the last quarter of 2013.

METHANOL PRICES

US methanol spot barge prices slipped to 122-124 cents/gal during the first week of December on production improvement in Trinidad and Tobago.

The Caribbean country's state-owned utility National Gas Company (NGC) said petrochemical producers there should now be receiving full supplies of natural gas.

An employee at NGC said the utility has recovered from a power outage in mid-November that shut down production for a few days. Any gas supply problems now are petrochemical producer-related and not because of NGC, the employee said.

Methanol, ammonia and other petrochemical producers at the Point Lisas Industrial Estate in Trinidad have operated for much of this year without full gas supplies because of work on offshore platforms.

US methanol imports in October fell by 33% year on year largely because of cutbacks in Trinidad and Tobago, according to data from the US International Trade Commission.

US methanol imports totalled 429.88m litres, compared with 637.01m litres in the same month of 2011. Imports from Trinidad declined by 41% in October to 266.04m litres, compared with 447.95m litres in the same month of 2011.

  • Additional reporting by Joseph Chang in New York

By: Lane Kelley
+1 713 525 2653



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