2014 washington methanol policy...

© METHANEX CORPORATION 2014

John Floren, President & CEO

2014 Washington Methanol Policy Forum

March 18, 2014


Who We Are: Global Presence

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Methanol...

3

• Is primarily produced from natural gas

• Has diversified end uses

Formaldehyde Acetic Acid Wood Industry, Pharmaceuticals, Automotive Fleece, Adhesives, Paints

Dimethyl Terephthalate Methyl Chloride Recyclable plastic bottles Silicones

Energy & MTO

(40% of Demand; High Growth) Traditional Uses (60% of Demand)

Fuel Blending

MTO Methanol-to-

Olefins

Marine Fuels

DME (di-methyl-ether)

MTBE


Fast Paced Demand Growth

4

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E

Chemical MTBE/TAME Fuel DME MTO/MTP (Merchant)

(000s tonnes)

2014 – 2017 CAGR:

Energy: 11.2%

Total: 7.5%

Source: IHS Chemical, January, 2014. Excludes integrated methanol demand for methanol to olefins and propylene

• Projected 7.5% CAGR, led by energy applications

2002 – 2013 CAGR:

Energy: 9.1%

Total: 5.2%

Note:

1 tonne

methanol =

332.6 US

gallons

© METHANEX CORPORATION 2014 5

0

20

40

60

80

100

120

2001 2006 2011 2016 2021

Supply ROW ex-China China Required for Balance Total New Supply Increase Demand

New Plants:

1. Latin America

2. Middle East

3. Asia **Most North American

plants close

New Plants:

1. Middle East

2. Asia

3. Latin America

New Plants:

1. USA

2. Iran

3. Russia/Africa

4. LA

5. Other

New Plants:

1. Methanex Egypt

2. 4 - 5 MMT USA New

3. 5 - 6 MMT re-start

(Mainly North America

but also New Zealand,

Libya, Azerbaijan)

Source: IHS December 2013– Demand figures exclude integrated Methanol to Olefins

(Mill

ion

to

nn

es p

er y

ear)

Methanol industry in USA revitalized

USA Methanol Production Resurgence


Potential for methanol based fuels in USA

• Produced at lower cost than oil based products like gasoline

• Reinvestment economics drive the long term methanol price

• Clean burning; produced from natural gas or any renewable carbon based feedstock

• Abundant feedstock

• Strategic benefits of energy security

• Methanol fuel is like ethanol and it’s low cost

• Easy to integrate into existing liquid transportation fuel infrastructure

• What’s needed?

• Government regulations that level the playing field and allow for true consumer choice. Not subsidies (e.g. Open Fuels Standard)

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• Relocating two plants from Chile to Louisiana

• Relocation offers significant capital savings and reduced project timeframe

• Geismar 1:

• Plant start up targeted for late 2014

• All plant and equipment on site

• One million tonnes of methanol/year

• ~1,000 construction jobs over two years

• ~130 permanent full-time, high-skilled jobs

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Methanex Growth: Relocations to Louisiana

© METHANEX CORPORATION 2014 8


• Geismar 2

• Plant start up targeted for H1 2016

• One million tonnes of methanol /year

• Dismantling in progress

• ~1,500 construction jobs over two years

• ~35 permanent full-time, high skilled jobs

• Both projects budgeted at ~ $1.1 billion

• Opens the potential for rebuilding America’s chemical industry. Downstream economic benefits


• Attractive project attributes:

• 10-year natural gas contract with Chesapeake to supply one plant

• Significant capital and schedule savings vs. greenfield

• Louisiana: attractive business environment & large methanol consuming region

• Evaluating Other Opportunities

in North America

• Potential third relocation • Greenfield project in

North America

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Aerial photo of Geismar site



Summary

•Methanol industry forecast to grow rapidly due to methanol’s growing

global use in energy applications

•Methanol offers a low-cost, clean route to US energy independence

and the foundation for other downstream industries

• Requires government support (not subsidies), to level the playing field

for using methanol as a fuel

• Underpins additional methanol projects and domestic job growth

•Methanex committed to growing in North America

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Thank you

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2014 washington methanol policy...

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