Largest US Methanol Plant Nearing to Start Production!

On 20th April, 2018 OCI announced the mechanical completion of new unit in Beaumont, Texas. The complete commissioning of the plant is expected in next two to three months. The unit has capacity of 1.75 million tonnes per year and is first totally new or greenfield methanol project in North America in recent decade.

Market Background: There have been around six or so plant built in North America in current decade. However, these built are either restarts or renovated capacities which have been fuelled by cheap natural gas availability. Plant restarts by Methanex in Alberta, Canada in 2011; OCI plant restart in 2012 Beaumont; near Houston plant restart by LyondellBasell in 2013 and Celanese/Mitsui capacity addition in 2015 are key activities happened in this decade.

The biggest activity among these was movement of two plants from Chile to Louisiana by Methanex, spending $1.4 billion to move two 1 million tonnes per year capacity. On the other hand, above mentioned OCI/Natgasoline technology plant would cost around 20% higher for new plant as compared to plant movement by Methanex. The details of the financial in OCI/Natgasoline technology plant are not clear but the industry experts are expecting cost around $2 billion till the commissioning stage. As per the update, the plant is expected to start production in second quarter of 2018 following the industrial wisdom.

Market Responses: From Demand and distribution side, the traders in the market are almost waiting for new plant to start. The methanol prices which rose from November 2017 through January 2018 are stabilizing but are still on higher side. The increased methanol supply in the market would impact derivatives market which ranges across applications from hair care to fuel additive to polymer among many others. Some of the markets which can be directly related with are fuel additives (such as octane improvers), Acrylic paint & coating (e.g. heat reflective paint & self-cleaning coating etc.), water treatment chemicals among many others.

– Ankur Kalra,
Infoholic Research