North America Methanol “In the Spotlight”€¦ · North America Methanol “In the Spotlight...

transcript

North America Methanol “In the Spotlight”

Presented to

Foro Pemex Petroqimica 2013

BY Jim Jordan

Jim Jordan & Associates An Argus Media Company

Topics for Discussion

• A Look at History • Will New and Restarted capacity in North America create a Methanol Glut? - Expansion Outlook (Real or Not???) - Can New Applications in North America mitigate a potential Oversupply? - Trade Pattern Change?

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E

FORMALDEHYDE MTBE ACETIC ACID M.METHACRYLATE

MTO/MTP GASOLINE/FUELS SOLVENTS MISCELLANEOUS

Methanol Capacity and Demand in the World

Total Stated Capacity

When is Over-capacity not Over-supply?

History of Supply • 1997 World Methanol Capacity was 28.5 million MT

BUT North America Was King of

Methanol S&D

North America Methanol Capacity in 2007 was:

More Than

10 Million MT

METRIC

Dec-98 Plaquemine, LA 480,000

Mar-99 570,000

Mar-99 261,000

Aug-99 450,000

Jul-00 450,000

Dec-00 990,000

Apr-01 200,000

Jul-01 570,000

Jul-01 375,000

Nov-03 120,000

Dec-03 180,000

Nov-04 770,000

Dec-04 750,000

Jun-05 600,000

Sep-05 500,000

Nov-05 500,000

Apr-07 850,000

Dec-07 260,000

8,876,000

Beaumont, TX

Clear Lake, TX

Bishop, TX

Canada

Edmonton

Mexico

Fortier, LA

Med Hat, Alberta

Plaquemine, LA

Texas City, TX

Geismar, LA

Delaware City, DE

Med Hat, Alberta

Pasadena, TX

Beaumont Methanol

Lyondell

Pace FL

Cheyenne, WY

Channel View, TX

Deleware City

Medicine Hat

Air Products

El Paso

Celanese Canada

Kitimat

Celanese Bishop Plant

Clear Lake Methanol

CLOSURES LOCATION

North AM Methanol Plant Closures 1998-2007

Georgia Gulf

Fortier (Methanex)

Medicine Hat

Ashland

Sterling

Borden Chem & Plastics

After Devastation of Shutdowns between 1998 and 2005

North America Methanol Capacity was Less than

1 Million MT

Looking Forward

• North American Methanol Capacity on Steep Rise

• Shale Gas Creating major opportunities for Industrial and Energy Expansion Projects

• Announced and Planned Methanol Projects Exceed 15 Million MT

• When Much of Existing Capacity is Not Effective Capacity

- China has about 40 million metric tons of capacity - China rarely runs at more than 65% operating rates -

at $300/MT (90 CPG) China typically operates below 50% - Major operating problems in Malaysia during the past two years - Significant natural gas interruptions in Trinidad since 2011 - Ongoing lack of gas in Chile. 3.8 million tons of capacity operating as less than 0.8 million tons production - Other unplanned outages

• When Much of Existing Capacity is Not Effective Capacity • When Prices are not high enough to Generate Profit for High

Cost Producers

- Once again, this drives low operating rates for coal-based producers in China - Eastern Europe with Expensive Gas

• When Much of Existing Capacity is Not Effective Capacity • When Prices are not high enough to Generate Profit for High Cost

Producers • When Politics interfere with International Trade

- Iran Sanctions - Libya Outage of nearly 2 years (Still unreliable) - Governments setting High Gas Prices (Argentina, Russia, others)

10,000

12,000

2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E

Methanol Demand in North America

North America Methanol Expansion

North America Methanol Capacity Expansion Generates Questions

• How much is needed?

• How much is needed? • How much is too much?

- 985,000 MT prior to OCI Beaumont restart last year

Name Location Ownership Capacity Timing Comments

Lyondell Channelview, TX Lyondell 780 Q4-2013 Re-start (Permit APP)

Celanese Clear Lake, TX Celanese + Partner 1,300 Late 2015 Permit June, 2013?

South Louisiana Meth South Louisana

Zero Emission Energy

Plants 1,650 Q4 2015 Announced

Moss Point Methanol Moss Point, MS Leucadia 1,000 2016-2017 Capacity EST.

Lake Charles Clean Energy Lake Charles Leucadia 1,200 2016-2017 Capacity EST.

G2X Energy Lake Charles G2X Energy 1,200 2017 For Gasoline

Total 7,130

Methanex Geismar, LA Methanex 1,000 Q4 2014 Under Construction

Methanex Geismar, LA Methanex 1,000 Early 2016 Announced April, 2013

Un-named Lake Charles Un-named 472 In Planning

Total 2,472

U.S. Gulf Coast 1,000 In Planning

U.S. Gulf Coast 1,200 In Planning

U.S. East Coast 1,200 In Planning

Total 5,400

Grand Total 15,002

(000) Metric Tons

Announced

Unannounced, In Planning

J im Jo r dan & A ssoc ia t es , LP

Relocations

US Methanol Capacity Expansion 2013-2017

With These Additions, We will have 4,850 MT by 2016

If ½ of the above happens, we will have approx. 7,850 MT By

2018 or 2019

BUT WAIT!

Country of Origin MT MT MT Total MT

2010 2011 2012

Trinidad and Tobago 3,699,296 3,756,885 3,432,373 10,888,554

Venezuela 656,910 881,717 1,012,898 2,551,525

Canada 4,475 103,909 150,863 259,247

Equatorial Guinea 383,986 365,898 283,017 1,032,901

Brunei 13,543 37,708 10,290 61,540

Bahrain 193,925 160,578 74,321 428,824

India 114 23 502 639

Japan 458 460 25,391 26,310

Germany 107 388 927 1,422

Switzerland 6 432 214 652

Others 142,592 168,398 86,490 397,480

Total Imports 5,095,410 5,476,396 5,077,288 15,649,094

United States M ethanol Trade 2010-2012

• How much is needed? • How much is too much? • Will there be winners and losers?

- Offshore Producers - Domestic Producers - Consumers - Traders

- Offshore Producers Fight for Market Share or Look for Other Markets

- Offshore Producers - Domestic Producers Fight for Domestic Market or Export

- Offshore Producers - Domestic Producers - Consumers Hope for a “Really” Big Fight

- Offshore Producers - Domestic Producers - Consumers - Traders Hope for Volatility which is almost Certain

What is the Key to the Outcome?

• Is it Methanol Prices?

- Of Course Prices are Important

• Is it New Applications for Methanol?

- Of Course that would help

MTG MTP DME Others

• Is it Natural Gas Prices?

YES, IT IS NATURAL GAS PRICES

J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J

2007 2008 2009 2010 2011 2012

WTI Crude Price $/mmBTU NG $/mmBTU MeOH $/mmBTU

Crude-NG-Methanol Spot Price CorrelationUS 2007-2012 YTD

Methanol

• Is it China Imports?

YES, IT IS CHINA IMPORTS TOO

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012ProjectedAnnual

China Methanol Implied Demand

Net Imports

Production

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E

Methanol Demand in China

Imports

In Summary:

1. North America Will Likely have More Than Adequate

Methanol Supply

2. Methanol Producers (Current and Future)

Will Need to Plan Carefully to Avoid

Disaster

THANK YOU!!!!

Jim Jordan & Associates An Argus Media Company

jja@jordan-associates.com www.jordan-associates.com

North America Methanol “In the Spotlight”€¦ · North America Methanol “In the Spotlight...

Documents