Trinidad and Tobago methanol plant closures could trigger price spike
Global methanol prices could rise following a report from Methanol Holdings (Trinidad) Ltd. (MHTL) that it will shutter two of its methanol plants in Trinidad and Tobago because of ongoing natural gas curtailments in the Caribbean twin-island nation.
Global methanol prices could rise following a report from Methanol Holdings (Trinidad) Ltd. (MHTL) that it will shutter two of its methanol plants in Trinidad and Tobago because of ongoing natural gas curtailments in the Caribbean twin-island nation.
The announcement comes in the midst of protracted negotiations between the world’s second-largest methanol producer and National Gas Co. Trinidad & Tobago Ltd. (NGC).
MHTL told OGJ that the closures would reduce production by 25% or 1.03 million tonnes/year. The company has complained that even after exhaustive negotiations with NGC to supply sufficient gas for its plants and exploring alternative supply options, it has no choice but to shut the two plants.
Both plants require a total of 108,000 MMbtu/d to run at full capacity.
Sources close to the negotiations tell OGJ that there are a number of issues plaguing the negotiations including the inability of the NGC and MHTL to settle on a price with NGC demanding a price that is 50% higher than what MHTL is prepared to pay.
Additionally, MHTL has been operating without gas contracts for three of its plants with one contract expiring in 2013 and two others expiring in 2015. NGC has been offering gas to those plants without a contract only after supplying other contracted customers.
MHTL markets its products through two major petrochemical marketing and distribution companies. The European and Asian markets are supplied via Helm AG while the North American market is supplied via Southern Chemical Corp.
Trinidad and Tobago has suffered natural gas shortages since 2011 but the country has said there will be alleviation with the coming on stream this year of almost 1 bcfd in gas combined from BP Trinidad & Tobago’s Juniper project, its TROC project, and its joint venture with EOG Resources Inc. to develop Sercan field (OGJ Online, Mar. 22, 2016).
