Methanex Trinidad Ltd has been successful in the five years of its existence, said Charles Percy, managing director and chief executive officer of the methanol company. Methanex Trinidad was established in 2006 and is a wholly-owned subsidiary of Canadian company, Methanex Corporation. Percy said Methanex Trinidad has two methanol production facilities: Titan and Atlas, which currently supply approximately 50 per cent of Methanex Corporation's total production output. The Canadian company owns and operates methanol production facilities in Chile, Trinidad and New Zealand, which have a total annual production capacity of 6.8 million metric tonnes. Methanex Corporation is the world's largest supplier of methanol. About 80 per cent of Methanex's total methanol output is used in the production of formaldehyde, acetic acid and a variety of other chemicals. The name plate capacity for the Atlas plant, Percy said, is 5,000 metric tonnes per day (mt/day) and for the Titan plant 2,500 metric tonnes a day.
Apart from gas curtailments, Percy explained that there are no major restrictions to operating the plants at full capacity. Percy said that Methanex Trinidad experienced its best year in 2008, where the Trinidad site passed its methanol production target by 14,704 metric tonnes. The total output was 2.67 million metric tonnes, he said. Percy was speaking with the Business Guardian at Methanex's fifth anniversary and family day celebrations on May 1 at Brechin Castle, Couva. Methanex shared its success with five charitable organisations: Arrive Alive T&T, The Just Because Foundation, ARROW Learn It from Tobago, Nature Seekers and Community Advisory Panel, with each receiving a $50,000 cheque.
Overcoming challenges
Methanex Trinidad has always been able to overcome its challenges, Percy said. "We have had some challenges, but it has never been because of human expertise, but mechanical design challenges we had to overcome, so the employees rose to the challenge and made it happen." He explained from 2009, the company site production fell by seven per cent and, in 2010, the company fell again by 14 per cent, making 2010 its worst year. Percy said this decline was attributed the outages from both the Titan and Atlas plants.
Titan, he said, was caused by a failure on the waste heat boiler, which is used to recover heat from the combined reforming process to generate high pressure steam. There was a forced outage on the Atlas plant which shut down the plant for two months, causing its volume to be much less than normal. Despite Methanex Trinidad's 2010 production decline, in that same year, the Methanex Corporation achieved an overall company reliability rate of 95 per cent. Percy said, "We believed that achievement was above the industry average, but below the challenging 97 per cent target that we set for ourselves."
Another challenge the company faced was the 2008 collapse of methanol prices. Percy said the price remained low in 2009, but has rebounded in 2010 and 2011. The prices have began to climb back up steadily from the company's average realised price of US$225 per metric tonne in 2009 to US$306 per metric tonne in 2010, he said. He said that since methanol is a versatile liquid chemical produced primarily from natural gas and is used as a chemical feedstock in the manufacture of a wide range of consumer and industrial products, such as building materials, foams, resins and plastics, it will sell, especially in large economies. Percy said large economies such as China and India were doing very well in methanol sales, with China, in particular, using more and more methanol in its gasoline pool.
Reduced gas supply
Methanex Trinidad also experienced a ten per cent decline in its expected gas supply from National Gas Company of T&T (NGC). Percy said there were several instances of gas curtailment from NGC since January 2011, causing plant rates to fluctuate between 85 and 100 per cent. Overall, Percy said the company performed well as it was not hard hit by the global economic downturn. He said Methanex Trinidad's ability to survive the financial downturn was a result of its sound corporate governance practices, conservative financial policies and focus on maintaining financial strength and flexibility through prudent financial management. He said its higher sales volumes in 2010-1.11 million tonnes higher than 2009-helped tremendously.
"Once we continue to make production and the prices are right, the profits are there." Percy said that Trinidad is now the flagship company for the Methanex Corporation. He said that the natural gas supply constraints in Chile-where one of four plants is in operation-and New Zealand (where one of two plants is in operation), means stronger dependence on the Trinidad site which has a reliable supply of natural gas. As such, the Methanex hierarchy will be very proud of the Trinidad operations," Percy said.
Fuel blending project
Methanex Trinidad, in collaboration with Methanol Holdings (Trinidad) Ltd ( MHTL), had embarked on a fuel blending initiative. MHTL is one of the world's largest methanol producers with a total capacity of more than four million metric tonnes annually from its five methanol plants located at the Point Lisas industrial estate.
The collaboration was geared towards engaging in a year-long study to determine whether this initiative will be technically and commercially viable. Percy said the research is showing that the fuel blending initiative will be technically and commercially viable. He said the team of professionals will present a report in July to Government as some investment is going to be required by Petrotrin (Petroleum Company of T&T) to make the technical part of the project workable.
Percy said the Government, particularly Energy Minister Carolyn Seepersad-Bachan, have been responsive. He said the fuel blending project was another way to reduce the gas subsidy, which in 2010 stood at $2.7 billion. The intent of the methanol fuel blending feasibility study, Percy said, is to displace roughly five per cent of gasoline initially, which can then be sold to the international market. Percy said that Methanex would be taking one per cent of the fuel that is sold locally, selling it abroad and replacing it with five per cent methanol. "But it would be transparent to the customers...they would not know the difference with the performance on their cars. It's a greener, cleaner burn and higher octane, so you get more power as well as it is better for the environment," Percy said. Percy said the supply and demand outlook for the methanol industry is very positive. "Recovering global economies and the growing use of methanol into fuel blending and other energy applications are expected to drive strong demand growth, and there is limited new methanol supply expected to come on line over the next few years," Percy said.
Brazil's prospects
Percy spoke positively about the benefits T&T can derive from Brazil's energy sector. Last month, Prime Minister Kamla Persad-Bissessar and a high level business team returned from a trade investment mission to Brazil. Speaking in the capacity of president of the Energy Chamber, Percy said there were vast opportunities in Brazil, not only in the energy sector, but also in Brazil's information and communications technology (ICT) sector and its film industry. Without a doubt, there is a great opportunity for Methanex Corporation. Methanex has seen an opportunity in the gas area. He said British Gas (BG) was spending about US$30 billion in Brazil while Brazil's Petrobras was spending US$100 billion to develop a section of the oil and gas over a ten-year period. Petrobras is Brazil's energy-based company with performance in exploration and production, trade, downstream, natural gas and petrochemicals, among others.
He said local companies can provide a wide range of services, including environmental services, welding, piping, drilling, diving and information and communications technology. "It's a massive opportunity and is only four hours of flying time." He said work has already began and BG is ramping up its operations. BG is looking to export oil from Brazil. In February, the BG Group announced a new discovery of oil (approximately 26?API in Block BM-S-10 in the Santos Basin, offshore Brazil. The discovery well 4-BRSA-818 (4-RJS-668), known as Macunaíma, is located in a water depth of 2 134 metres, approximately 244 kilometres off the coast of Rio de Janeiro State. BG now has about 150 people in Brazil, and is looking to increase that to 1,000. The opportunity is there for us as BG is looking for contractors to support its venture," Percy said.
What is methanol?
Methanol is a clear, biodegradable liquid petrochemical made usually from natural gas; though it can be produced from any carbon-based source, including coal, municipal wastes, landfill gas, wood wastes and other sources. Methanol is used in a number of industrial and consumer products, including adhesive resins for plywood and similar construction materials, polyester fibers and packaging, plastics, paints, coatings, fuels and fuel additives. As it is carbon-based, methanol has applications in the alternative energy sphere and in the biofuels arena. It can also be used as a fuel additive or blended directly into transportation fuels. Other energy applications include dimethyl ether, biodiesel and methanol-to-power.
The fastest growing markets for methanol are in the energy sector, which today represents about one-third of methanol demand. The global demand for methanol is around 38 million tonnes a year, of which approximately two per cent is supplied from Equatorial Guinea, a significant contribution from a single plant. Product is shipped to Europe and the United States. Methanol is the simplest member of a group of organic chemicals called alcohols. In outline, methanol is made by mixing natural gas with steam, heating this to 900°C and passing the mixture over a nickel catalyst in a steam reformer. The gas/steam mixture is transformed to produce "synthesis gas," which is pressurised, converted to methanol over a copper catalyst and distilled to yield pure methanol.