Canadian methanol producer Methanex will decide whether to relocate a second methanol plant to Louisiana from Chile, where it has four plants, a company executive said Wednesday.
"We will make the decision for the second plant in the second quarter" of 2013, said Tim Williams, Methanex's vice president of upstream & feedstock acquisition.
In January, Methanex announced it would relocate a 1 million mt/year plant from Chile to Geismar, Louisiana.
Construction of the first plant in Louisiana, which is scheduled to come online by the end of 2014, will have an estimated cost of $550 million. Dismantling of the facility in Chile has already begun, Williams said.
The company said lower natural gas prices in the US were the driving factor behind the decision to relocate the plant.
In Chile, Methanex has four methanol plants at Cabo Negro, near the city of Punta Arenas, with a combined capacity of 3.8 million mt/year.
The company, which gets its gas supplies from Argentina, has faced supply interruptions since 2007 as cold winters in Argentina pushed the government to divert supplies to domestic power generation.
As a result, Williams said, only one plant is running in Chile and at less than 50% capacity.
The relocation costs for the second plant would be less than $550 million, Williams said.
"Mobilization fees for things like heavy cranes and such would be cheaper in that we would time it so there would be no demobilization period," he added.
In the meantime, Williams is busy securing supplies for the Geismar methanol plant. Some 100,000 Mcf/d of gas feedstock would be necessary for operations, he said, with a total contract price tag of some $2 billion.
Williams has had negotiations with around 20 US gas producers to secure those supplies, but is shopping for a non-NYMEX based price.
"What we offer around the world is a base price for gas and revenue sharing based on methanol prices," Williams said.
"That removes the risk from the low gas price for producers, but is a high enough price for them to drill in dry gas plays," he added.
