23 March 2013 16:30 [Source: ICIS news]
HOUSTON (ICIS)--The US methanol expansion may have reached its limit in terms of planned projects in Louisiana, sources said this week heading into the American Fuel & Petrochemical Manufacturers (AFPM) International Petrochemical Conference.
Five new or restarted methanol plants have been announced in the past year, which, if actually started and finished, would push the US from being a net importer of methanol to being a net exporter of the material within the next few years.
While it does seem a good bet that the US will become self-sufficient in producing its methanol needs during the near-future, sources said it is a longshot that all of the announced projects will break ground.
Four of the five methanol projects have target sites in southern Louisiana. Celanese also plans to build a methanol plant at its huge acetyls complex near Galveston, Texas.
A supplier doubted whether there is enough pipeline and natural gas capacity for all of the Louisiana projects, though he said the area has enough gas supply capacity for current needs.
“But in six months or a year down the road?” the supplier asked. “There’s going to be a pipeline capacity bottleneck.”
Methanex plans to move one and maybe two idled plants from Chile to that area, in Geismar, Louisiana. The company said in late January that it had signed a long-term gas supply contract with Chesapeake Energy.
Ammonia producers have also targeted the corridor.
Other than getting the natural gas to power the projects, another tall order will be to find financing for them in an uncertain US economy. Not all of the methanol projects have financing in place.
Leucadia National said late last year that it had signed offtake agreements for its proposed $2.5bn (€1.9bn) petcoke-methanol plant in Lake Charles, Louisiana, but the company’s latest 10-k filing said that it has not yet arranged the “significant” financing from third-party sources that the project requires.
Leucadia said in the filing that it could give no assurance that the project would be developed.
AFPM begins on Sunday and lasts through Tuesday in San Antonio, Texas.
($1 = €0.77)
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