Trinidad’s MHTL becomes partner in Louisiana methanol project

HOUSTON (ICIS)–Trinidad’s Methanol Holdings Trinidad Limited (MHTL) will become a partner in the G2X Energy methanol plant project at Lake Charles, Louisiana, the company announced on Thursday.

Other partners in the 1.4m tonne/year Big Lake Fuels methanol project include Southern Chemical Corp (SCC), which is the North American marketer for MHTL, Proman Holding AG and Helm AG. The latter companies are now part of MHTL’s ownership group.

When G2X first announced the plant, it was going to be a methanol-to-gasoline project, but the company has since backed away from that plan.

“The Big Lake Fuels plant will initially produce methanol, and methanol-to-gasoline production will be an option in the future,” said G2X chief executive Tim Vail in the release.

Methanol tracks the price of oil fairly close, and with oil at $56/bbl as it was in morning trading today making gasoline from methanol makes less economic sense than it did in January 2013 when the plant was first announced.

West Texas Intermediate oil futures at that time traded around $93/bbl, so crude has dropped about 40% since then.

MHTL operates five methanol plants on the island and was sold to a group in October that included Proman and Helm. Swiss-based Proman operates the MHTL plants and has built five world-scale plants in Trinidad and Oman similar in design to the Big Lake Fuels project.

A methanol trader said the addition of MHTL as one of the plant’s backers strengthens the possibility that it will actually get built and also signals that the Trinidad producer is not giving up on maintaining its US customer base.

“From an economic standpoint, it makes sense for MHTL to diversify away from their Trinidad assets,” the trader said.

The Lake Charles project received air and construction permits from the state of Louisiana in May. G2X said construction should begin in early 2015, after the project obtains remaining permits and finishes initial engineering.