Dallas-based Celanese Corp. has signed a deal with Tokyo-based Mitsui & Co. Ltd. to explore a joint venture for building a methanol production facility at Celanese's integrated chemical plant in Bishop, TX, as the Texas-based company originally outlined a year ago (see Daily GPIApril 8, 2014).

Celanese said the new unit would have an annual capacity of 1.3 million tons (mmty), while leveraging the design benefits of its Clear Lake, TX, methanol unit, which is currently under construction (see Daily GPIJune 15, 2012). Mitsui is a joint venture partner in the Clear Lake plant.

The global technology/specialty materials company said it has filed for air permits with the Texas Commission on Environmental Quality for the proposed Bishop facility. A final decision on whether to proceed will be based on global market conditions for methanol as well as construction costs, Celanese said.

In addition to the Bishop deal, Celanese and Mitsui said they have entered an amended five-year agreement allowing Celanese to purchase methanol from Mitsui once the Clear Lake plant is operable. That unit, located 500-600 miles north of Bishop, is scheduled to start in October, the companies said.

Expressing optimism on the expansion of the partnership, Celanese CEO Mark Rohr said the combination of the Texas plants will ensure that the company's U.S. methanol needs are "balanced," but it will not completely eliminate what he called "our methanol-related earnings headwinds."

With the shale revolution in the United States, there has been a surge in interest in redeploying methanol production facilities, particularly in and around the Gulf of Mexico (see Daily GPIApril 9, 2014).

In discussing the prospects for the Bishop unit last year, Celanese officials said the methanol unit would use "abundant, low-cost natural gas in the U.S. Gulf Coast region" as its feedstock and would benefit from the existing infrastructure at the Texas site. On average, it takes 32 Bcf of natural gas to produce 1 mmty of methanol.