Canada’s Methanex to move forward with US methanol project

HOUSTON (ICIS)–Methanex’s board of directors has reached a unanimous decision to build a 1.8m tonne/year methanol plant in Geismar, Louisiana, where the Canadian company has two existing methanol facilities, the company said in a news release.

The company expects costs for the project to be US $1.3bn-1.4bn. This is in addition to the $60m costs already incurred on the project.

“Our long-term outlook for the methanol industry is very positive. Demand forecasts for methanol are strong and new capacity additions will be needed to meet expected demand growth,” said John Floren, president and CEO of Methanex.

The “Geismar 3” plant is expected to begin construction in 2019, with operations to begin in 2022.

Early this year, Methanex said that geopolitical concerns had decreased interest from potential investors but that the company would nevertheless pursue building the plant without a partner.

Then in March, the company said that the board of directors nominated by its largest shareholder, M&G Investment Management, were not qualified, and eventually settled the issue by recommending one of M&G’s proposed directors onto the board.

“As part of the cooperation agreement we reached with M&G Investments earlier this year, we retained an independent financial advisory firm to advise and support the Audit, Finance and Risk Committee of the Board in reviewing the Company’s financing plan for the Geismar 3 project. The independent review was rigorous and the report, which was reviewed in detail with the Audit, Finance and Risk Committee and shared with the full Board as part of their review of the Geismar 3 project, concluded that we have a robust financing plan,” Floren added in Friday’s release.

Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. Smaller amounts go into production of dimethyl terephthalate (DMT), methyl methacrylate (MMA), chloromethanes, methylamines, glycol methyl ethers, and fuels applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.

Major US methanol producers include Methanex, OCI, Celanese and LyondellBasell.

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