Methanex move of 2nd Chile plant is likely but not definite – CEO

31 January 2013 19:55  [Source: ICIS news]

HOUSTON (ICIS)--Moving a second methanol plant in Chile to Louisiana appears likely for Methanex but the company’s top executive said on Thursday that the final decision has not been made.

The company already has begun moving a 1m tonne/year plant from Punta Arenas to Geismar, Louisiana, following an announcement in July.

Methanex said in its latest earnings release that management intends to relocate a second plant in Chile to Louisiana. But new chief executive John Floren said on Thursday that a final decision has not been made yet.

“If you asked me and said I had to make a decision today, I’d say go ahead,” Floren said in an earnings conference call. “But I don’t have to make it today, so I won’t.”

Methanex has two idled plants at its complex there and one that is running at only 20% capacity, according to the company.

Floren said during the call that the company’s current view of its Chilean operations is to operate only two plants there.

“Our plan is to focus on a two-plant operation in Chile,” Floren said.

The units in Chile are idled because they lack a reliable supply of feedstock natural gas. Methanex said earlier this month that it will shut down all Chilean operations in March and, hopefully, restart them later this year.

Shale gas technology has made the US a magnet for methanol producers in the past two years. Methanex said last week that it has secured a 10-year agreement for natural gas at its Louisiana site.

Floren said Methanex has estimated the cost of moving a second unit in Chile to Louisiana at roughly $75m-100m (€56m-74m) less than the cost of the first move, which the company has priced at $550m.

The idea of moving a second Chile unit has been discussed publicly by Methanex executives since the first move was announced in 2012.

Floren said the only obstacle now would be an unforeseen economic event like the recession of 2008.

“These black swans have a way of coming forward when you’re not expecting them,” Floren said, referring to a concept in a book written in 2007 by trader and scholar Nicholas Nassim Taleb.

($1 = €0.74)


By: Lane Kelley
+1 713 525 2653



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