By Malini Hariharan
More news has emerged on the Trinidad methanol and methanol-to-olefins (MTO) project covered by the blog last week. Chinese major Sinopec is likely to be SABIC's partner for the $5.3bn project. The two companies are in negotiations with the Trinidad government, said SABIC.
With Sinopec as a partner, SABIC would gain access to the former's MTO technology. The technology has been developed by Sinopec's Shanghai Research Institute of Petrochemical Technology (SRIPT) and was commercialised by subsidiary Zhongyuan Petrochemical last year at a 600,000 tonnes/year facility in China. SRIPT has also developed a methanol-to-propylene technology.
Sinopec is also independently pursuing MTO projects in China using coal as the starting point. It has set up a joint venture with the Henan government for a $3.3bn project. Analysts see the move as part of a strategy to diversify its investment portfolio and reduce its heavy dependence on crude oil imports during China's 12th Five-Year Plan (2011-2015).
The Trinidad venture also takes forward a Protocol of Cooperation signed by the two companies last month to explore new business opportunities. It includes a new polycarbonate (PC) plant at Tianjin, China, using SABIC's rechnology.
The proposed project fits with Sinopec's strategy of becoming a global player. It has made significant progress in the upstream business by acquiring stakes in various oil and gas exploration projects around the world. In refining, it will be partnering with Saudi Aramco to build a new refinery at Yanbu, Saudi Arabia. The Trinidad project would be the company's first major petrochemical venture overseas.
But the project is attracting plenty of criticism in Trinidad. The price at which natural gas will be made available has become a controversial point. Questions have also been raised on whether gas should be diverted to this project at Port Lisas at a time when there is not enough being given to other plants at that location. Natural gas supplies to methanol plants at the Point Lisas complex were cut by 15-30% each month for most of 2011, reports ICIS news.
And the Trinidad Guardian reports that the US embassy has objected that US companies were not given a chance to participate in the bidding process.
The US objection makes sense as Trinidad supplies 70 pecent of US methanol imports and 60 percent of American ammonia imports.