Methanex has reached a final investment decision to proceed with the relocation of a 1 million tpy methanol plant from its Chile site to Geismar, Louisiana, the company said on Thursday.
The Louisiana plant is targeted to be operational by the end of 2014.
The expected cost of the project, including all owners' and pre-start up costs, is approximately $550 million.
We have completed the engineering study which reaffirms that the project offers substantial capital savings compared to a greenfield methanol plant, said Bruce Aitken, CEO of Methanex.
In addition, it can be executed in significantly less time, which allows us to capitalize on the current low natural gas price environment in North America."
Mr. Aitken said Geismar is an good location for a methanol project.
It possesses world-class infrastructure, skilled workers and is a positive, low-risk environment in which to do business, he said. It is also a large methanol-consuming region which offers the potential for substantial logistics cost savings.
We have commenced dismantling of the plant and expect to receive all key permits by the end of 2012."
Methanex noted that the timing was excellent for the move.
The demand outlook for methanol is strong and there is little new production capacity being added to the industry over the next several years, Mr. Aitken said.