Methanol Will Flow from Down Under

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Financing has been approved for GTL Resources PLC (LSE: GTL) (London, England) to construct a one million ton a year methanol plant in Dampier, Australia. GTL will receive $290 million of the $480 million total needed to construct the plant. Four international banks, WestLB, Societe Generale, Bank of Scotland, and National Bank of Australia, will each lend $72.5 million of the $290 million loan. Construction could begin during the second half of 2003 and a completion date is scheduled for late 2005.

Vitol S.A., an international oil and gas trader based in Geneva, Switzerland, has committed to a long-term contract to buy the entire production amount and will sell the methanol to the markets in the Asia-Pacific region.

Lurgi Oel Gas Chemie GmbH (Frankfurt: MGT) had been selected as the engineering and construction contractor in early 2002 and will apply their process technology for the methanol production. Lurgi uses autothermal reactors to reform natural gas with oxygen making production more economical than competitors' technology. Lurgi leads the methanol market share with 55% of the methanol production and plants and is responsible for a worldwide total methanol production capacity of over 15 million tons a year.

Methanol can be produced from wood, coal, biomass or natural gas, the latter is the most economical to use. It is the simplest chemical structure of all the alcohols. Europe is the leading methanol producer followed by the US and Australia/Asia Pacific. Methanol is used as a feedstock material to produce formaldehyde, acetic acid, methyl tertiary butyl ether (MTBE) and other intermediates. Methanol is also being researched as a fuel for vehicles, as it contains no sulfur or nitrogen, thereby offering a cleaner fuel than gasoline.

Click the image to the right to view an index of international methanol projects reported during 2002

Methanol production in North America has declined over the past two years with several producers closing or retooling their plants to produce products less dependent on natural gas. Dramatic increases in the price of domestic natural gas has made producing methanol in the U.S. unprofitable at best. Methanol continues to enjoy growth internationally as developing countries support its demand as a building block chemical and feedstock.