A new methanol plant that Vancouver’s Methanex Corp. (TSX:MX) relocated from Chile to Louisiana went into production earlier this week.
In 2012, after Argentina shut off natural gas supplies to Chile to meet its own domestic demand, Methanex decided to disassemble two plants that had been idled in Chile and ship them to Louisiana.
Building a new plant would have taken five years, Methanex CEO John Floren told Business in Vancouver in a 2013 profile.
In an effort to capitalize on the rising global demand for methanol, the company decided it was worth the effort of disassembling two plants, shipping them across the ocean, moving up the Mississippi River and reassembling them in Geismar, Louisiana, where the company has a long-term gas supply with Chesapeake Energy Corp. (NYSE:CHK).
The total cost of the relocation was US$1.4 billion. The first plant went into production in January 2015, and on December 27, 2015, Geismar 2 also went into production.
“We believe this represents a substantial cost savings relative to a new-build plant, and we expect the Geismar 2 plant will create significant cash-flow and value for shareholders,” Floren said in a press release.
"We are extremely pleased to announce that our Geismar 2 plant is producing methanol roughly three months ahead of our original schedule. We expect the plant to ramp up to full production rates over the coming weeks.”
The two new plants have grown Methanex’s total methanol production by three million tonnes over the last three years.
Methanex is the world’s largest producer of methanol, which is made from natural gas and is used to make plastics, paints, building materials, polyester and pharmaceuticals. But it’s as a fuel or fuel additive where the greatest demand is growing, particularly in China.
Methanex has methanol plants strategically located around the world, in Canada (Medicine Hat), Trinidad, New Zealand and Egypt.
It also owns its own shipping fleet, Waterfront Shipping, with tankers moving methanol to global customers, and backhauling other chemicals.
