06/01/2012 | Editor: Dominik Stephan
Vancouver-based Methanex, the world’s largest supplier of methanol, plans to relocate one its production sites from Cabo Negro, Chile, to Geismar, Louisiana, USA. The company explains this step with the difficult supply of natural gas in Chile.
Vancouver/Canada – Methanex has four plants at its Cabo Negro complex in southern Chile, but they are operating significantly below capacity, mainly due to curtailments of natural gas supply from Argentina, company speakers explained. Although the firm was supporting the exploration of natural gas sources in southern Chile, the timelines for significant increases in gas production were longer than had originally been anticipated and existing gas fields were experiencing declines, Methanex fears.
“We are planning to relocate one of the idle Chile methanol plants with a capacity of approximately 1.0 million tonnes to the Gulf Coast area of the United States,” the company said in a statement. “We have secured land in Geismar, Louisiana and are progressing site-specific engineering works. We expect to make a final investment decision in Q3 2012 and the plant to be operational in late 2014. We are also continuing to examine the viability of utilizing coal gasification as an alternative feedstock in Chile.”
The announcement was made during the presentation of the company’s results for the first quarter of 2012, in which Methanex reported profits of $39 million, up from $37 million in the same quarter of 2011, but down from $65 million in the final quarter of last year. "Our earnings for the first quarter were impacted by lower sales of Methanex-produced methanol and one-off items and we expect to deliver stronger earnings as the year progresses,” said Bruce Aitken, President and CEO.
“Methanol demand has remained healthy, the pricing environment has been stable and we reported another good quarter of cash flow generation. The outlook for the industry also looks very attractive, as demand growth is expected to significantly exceed new capacity additions over the next few years."
In the US, the company could also profit from the recent boom in unconventional natural gas ('shale gas') in the US. Natural gas is currently becoming more important, not only as a source of energy but also as a valuable feedstock and raw material for the chemical industry. Analysts already expect natural gas to replace crude oil in the future.
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