Despite lower oil and gas prices, some methanol producers feel they are on the cusp of a boom, encouraged by the advent of new marine fuel applications and rising Chinese demand in the energy and methanol to olefins sectors.
As 10/12 Industry Report details in a feature from the new current quarterly issue, the industry is particularly excited about the potential of new marine applications for methanol. In April, Waterfront Shipping, a subsidiary of the world’s largest methanol producer, Methanex, launched seven 50,000-ton marine vessels built with dual-fuel engines that can run on methanol, fuel oil, marine diesel oil or gas oil.
The conversion will enable the vessels to comply with a 2020 deadline imposed by the International Maritime Organization, an agency of the United Nations, to reduce marine fuel sulfur content to less than 0.5% globally. Waterfront also operates the world’s largest methanol ocean tanker fleet, with 22 deep sea tankers maintaining an uninterrupted flow of methanol to storage terminals and plant sites around the world.
Anticipated growth in demand for methanol has led to other investments in Louisiana. Houston-based G2X Energy broke ground in mid-January 2016 on a $1.6 billion methanol plant in Lake Charles. The 200-acre Big Lake Fuels Methanol Plant is expected to produce 1.4 million metric tons of commercial grade methanol per year upon completion in 2019. It will also be capable of converting methanol into automotive gasoline.
In St. James Parish, China-based Shandong Yuhuang Chemical Inc. broke ground in September 2015 on a $1.85 billion methanol plant, to be built in three phases. The first phase, which company officials have said is expected to be up and running in the first quarter of 2018, will be a methanol plant expected to produce 1.7 million tons annually.
By far, China is methanol’s biggest consumer, despite a leveling off of the economy there. A growing market in China is the conversion of methanol to olefins, which are a raw material used to create synthetic rubber and plastics, among other products.
“On a global basis, global methanol demand in 2015 was 70 million metric tons,” Dolan says. “Of that demand, probably 40% of it was in China. In fact, last year the Chinese consumed 7 million metric tons of methanol in their cars, trucks and buses.”
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