METHANOL SUPPLIES COULD BE PINCHED BY MID-1990S

Global supplies of methanol could be very tight by the middle of the 1990s because of pending reformulated gasoline specifications. Those specifications will require a minimum oxygen content in gasoline blends to reduce emissions of carbon monoxide. Most of the oxygen requirement will be met by blending methyl tertiary butyl ether (MTBE) into gasoline. Methanol is one of the two feedstocks needed to make MTBE.

Sept. 17, 1990

2 min read

Global supplies of methanol could be very tight by the middle of the 1990s because of pending reformulated gasoline specifications.

Those specifications will require a minimum oxygen content in gasoline blends to reduce emissions of carbon monoxide.

Most of the oxygen requirement will be met by blending methyl tertiary butyl ether (MTBE) into gasoline. Methanol is one of the two feedstocks needed to make MTBE.

A multiclient study, conducted by Crocco & Associates Inc., Houston, shows that global methanol demand will grow 4.1 million metric tons/year to about 21.4 million metric tons/year in 1993 from about 17.3 million metric tons/year in 1989, an increase of some 23%. That is primarily in response to increased demand for MTBE (see chart).

Methanol nameplate production capacity will grow, however, only 12%, moving to about 24.8 million metric tons/year by 1993 from about 22.1 million metric tons/year in 1989 (see table).

Considering that only about 90% of nameplate capacity can be fully utilized, the increased demand will push methanol plant operating rates to 96% by 1993, according to Crocco & Associates.

There are currently a few methanol plant projects under way that will add some methanol capacity. Two or three small plants in the U.S. and the Petralgas plant in New Zealand, that will clean up crude methanol to chemical grade, will start this year and add about 450,000 metric tons/year capacity, according to Crocco & Associates.

One large-scale methanol plant is under construction in Saudi Arabia, but this plant will not likely start up until 1992.

Higher methanol demand will boost methanol prices during the 1990s and spur new plant construction. But new plant facilities would take some time to construct, keeping methanol supplies tight.