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Resurgence in U.S. Methanol Expansions Underway, Says CEO

Fueled by inexpensive, abundant domestic natural gas supplies, the return of methanol production to North America will continue with additional expansions planned on the Gulf Coast, according to the CEO at the world's biggest methanol producer, Methanex Corp., headquartered in British Columbia.

The most recent example of the ongoing surge came earlier this month with Celanese Corp. announcing plans to assess whether to build another methanol plant in South Texas (see Daily GPI, April 8).

Methanex CEO John Floren said in March at the Methanol Policy Forum in Washington, DC, that his company may eventually have five new production plants in North America, including two Latin American production trains the company is relocating in Louisiana (see Daily GPI, Jan. 25, 2013; Oct. 31, 2012). A third relocation of production facilities from Chile to the Geismar, LA, site is being considered, Floren said.

All of the equipment for the first production train is onsite in Louisiana and the facility should be producing methanol by the end of this year, Floren said. The second transferred Chilean train should be onsite by this summer and production from that equipment would start in early 2016.

Each of the reconstituted production facilities has a 1 million metric tons/year (mty) capacity. Natural gas is the basic feedstock for methanol production, and it takes roughly 32 Bcf of gas annually to support 1 million mty production of methanol.

Dismantling and then reassembling plants cuts normal construction time in half, and at about 60% of the capital cost of a new, greenfield plant, such as the one in Medicine Hat, Alberta, Canada, Floren told the forum.

Methanex reported its highest annual profits and sales volumes in  history for 2013, and Floren said that Methanex expects an annual growth rate of 7.5% from 2014 through 2017. Methanex is in the process of adding 3 million mty to its global production capacity, reaching 8 million mty in 2016 when new market supplies of methanol are expected to be limited, he said.

While a third production train in Louisiana is a possibility, officials of the Vancouver company have cautioned that it is just one option being assessed now. There are various considerations being looked at, including whether Methanex's Geismar site is big enough to accommodate a third set of production equipment.

Floren underscored at the forum that there has been a resurgence of interest in methanol production in the United States after a decade of movement overseas of production capabilities (see Daily GPI, Jan. 3). Restarting previously long idle plants and building new ones has been a growing phenomenon in North America the past two years, taking advantage of low-cost gas and natural gas liquids (see Daily GPI, Dec. 30, 2013).

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