China, BP venture planning two methanol plants in US northwest

23 January 2014 23:37 Source:ICIS News

HOUSTON (ICIS)--A joint venture backed by a Chinese government agency and BP plans to build two $1bn methanol plants in the US northwest, it was announced on Thursday.

The plants would convert natural gas to methanol and be built on both sides of the Columbia river, one in Clatskanie, Oregon, and the other in Kalama, Washington, according to a publicist for the joint venture, Northwest Innovation Works.

The China-BP plan marks the first proposal for methanol plants outside the US Gulf Coast, which has seen several methanol plant announcements in the past two years seeking to capitalise on cheap natural gas from the shale gas boom.

It would be the first methanol plant in the northwest, according to publicist Greg Peden. It also represents the first proposal to call for making methanol in the US but not for American use. Peden said the project would pipe in natural gas to the two units, which would convert the gas to methanol and then ship it out to China.

All of the methanol produced at the plants would be exported to China for the specific purpose of supplying material to the Dalian Xishong Island Petrochemical Park in China, which would convert the methanol to olefins that would be used to make plastics and rubber.

Dalian, on China’s east coast across from South Korea, is key to the project. The plan calls for two Panamax-size vessels a week to deliver methanol from each northwest plant.

Northwest Innovation Works is a joint venture between BP and the Chinese Academy of Sciences, with other backers including the city of Dalian, China, and H&Q Asia Pacific, a hedge fund that brought Starbucks to China.

The two plants would each employ about 120 people and produce 10,000 tonnes of methanol daily, or roughly 1.6m tonnes/year for each unit.

The proposal calls for construction on the first unit to begin by the second quarter of 2015 and be up and running by the first quarter of 2018.

About 1,000 union construction workers would build each of the first-phase plants, according to information supplied by Peden.

By Lane Kelley