Methanex Corp. (TSX:MX) announced September 8 that it plans to restart its 470,000-tonne-per-year methanol plant in Medicine Hat as of April 2011.
The news from the world’s largest methanol producer confirmed what Business in Vancouver suggested in May was likely to be announced later this year (see “Methanol giant eyes restart of Canadian operations” – issue 1072; May 11-17).
The plant has been idle since 2001, and the estimated capital cost to restart it is more than $40 million.
“We’re delighted to be working on the restart of our plant in Medicine Hat, which offers a unique opportunity to capitalize on the attractive pricing dynamic between methanol and natural gas in that region,” CEO Bruce Aitken said in a release. “We believe that the current lower natural gas price environment in North America has made this plant a competitive new supply source for our customers.”
Back in 2001, prices were high for natural gas, which is the primary feedstock used to create methanol.
When Methanex closed its Kitimat plant four years later for the same reason, it cued the end of Methanex’s Canadian production. The company then turned its attention to plants in Chile, Trinidad and New Zealand.
Construction at Methanex’s $900 million Egyptian plant is expected to finish this summer.