An OCI subsidiary will build a world-scale, 1.75m tonne/year methanol plant at its Texas site in Beaumont, the company said on 21 November.
It would be the largest methanol plant in the US when production begins in late 2016, according to the OCI announcement.
OCI could not be reached immediately, but its chief executive, Nassef Sawiris, told the Houston Chronicle that the goal would be to make methanol as a substitute for gasoline or to be blended with the fuel.
Methanol’s high octane rating and cheap price – at roughly $1.60/gal on the spot market now – has increased its popularity in recent years as a possible alternative fuel or gasoline blend competitive with ethanol. The newspaper said Sawiris estimated the plant would cost more than $1bn (€750m).
Industry executives have pegged the cost of new methanol plants in the US at roughly $1m per tonne of capacity.
OCI’s Texas methanol project is the fifth greenfield or new methanol plant to be announced in the US since the Netherlands-based OCI restarted a mothballed methanol plant in Beaumont in July 2012.
Methanex restarted another plant in Medicine Hat, Alberta, about a year earlier, in April 2011.
North America has been a magnet for methanol activity over the past two years, with Methanex and OCI leading off with plant restarts.
The common denominator in at least eight announced domestic methanol projects is that they seek to capitalise on cheap natural gas from the US shale gas revolution.
The list of projects to be restarted, expanded or built new in Texas, Louisiana and Canada over the next two to three years, if completed, would shift the US from being a net methanol importer to net exporter.
OCI CEO Sawiris noted that shift in the announcement, stating that the new plant would “help reduce a substantial reliance on annual methanol imports into the country.”
The US imported about 5.12m tonnes of methanol in 2012, according to the US International Trade Commission (ITC).
OCI said the new plant, to be built by a wholly owned subsdiary, Natgasoline LLC, will be on a 514-acre site in Beaumont that the company recently purchased.
The project will use state-of-the-art methanol technology and incorporate best available environmental control technology.
Natgasoline submitted applications for environmental approvals at both state and federal levels in February 2013.
Methanol players say the new OCI unit will lead to excess US capacity.
OCI’s plan to build a world-scale, 1.7m tonne/year methanol unit in Texas would put the US over the top in meeting domestic demand, industry observers said on 21 November.
“So we will make 40m tonnes of methanol and just drink it, I guess,” said one methanol seller.
The seller was exaggerating, of course. However, the seller’s point was that a wave of announced methanol plants for the North American market over the past two years has now put the US in clear sight of being a net exporter by 2017.
With annual US methanol demand pegged at 5.5m-6.0m tonnes/year and current domestic production of the petrochemical at about 1.5m tonnes/year, even the most likely projects for Texas and Louisiana would provide more than enough capacity to forego the need of any imports from Trinidad & Tobago and Venezuela, which supply about 90% of all US methanol imports.
Those projects include the following:
- LyondellBasell’s restart project in Channelview near Houston (780,000 tonnes/year), which should be running by the end of this year or early 2014 at the latest.
- Methanex has begun moving one of its idle units in Chile to Louisiana (1m tonnes/year) and expects to have it running by mid-2014. The company also plans to move another unit (900,000 tonnes/year) in Chile to the US state by early 2016.
- Celanese and Mitsui plan to build a methanol unit in Clear Lake, Texas (1.3m tonnes/year) that is expected to be running by mid-2015.
- Refining giant Valero plans to build a methanol plant near New Orleans (1.6m tonnes/year) that will be running by early 2016.
Add the capacity at those plants (approximately 4.5m tonnes/year, not counting Methanex’s second unit in Chile) to the ones already operating in North America in Canada and Texas, and US demand would be met.
Realistically, some of the announced projects will never get up and running because of the cost and regulatory hurdles in place. An analyst earlier this year said that only 60% of the announced projects would be built.
A methanol trader said OCI’s new announcement suggests it most likely will depend on putting methanol into the fuel supply – if not in the US, then in other countries that are blending methanol into gasoline already.
“They’ll be at a deepwater port,” the trader said. “Worst-case scenario, they ship it to China.”