Methanex to build 1.8mn-tonne methanol plant in Geismar

The cost of the project is expected to be between $1.3-$1.4 billion.

Methanex has a robust and flexible financing plan for the Geismar 3 project. “We have arranged committed financing for the project with a new five-year $800 million construction facility and for the renewal of our existing $300 million revolving credit facility, which replaces the company’s existing revolving facility, to provide further liquidity. Both facilities have been arranged with a syndicate of banks and will expire in July 2024. In addition, the company expects to access the debt capital markets during the second half of 2019 to pre-fund approximately $250 million of the Geismar 3 2020 expenditures and to repay the company’s $350 million aggregate principal amount of bonds due in December 2019,” a Methanex press release said.

“We are extremely pleased to move forward with the Geismar 3 project which we believe will create significant long-term value for shareholders. Compared to a standalone US Gulf greenfield plant, this project benefits from substantial capital and operating cost advantages, and we expect will deliver outstanding returns. We believe we are well positioned to complete this project as we have a rigorous and well-defined execution plan, an experienced team in place and a strong balance sheet and financial flexibility to execute the project safely across a wide range of prices. As we have stated previously, we have a preference to have a strategic partner for the project and we will continue to pursue that option,” said Methanex president & CEO John Floren.

“Our long-term outlook for the methanol industry is very positive. Demand forecasts for methanol are strong and new capacity additions will be needed to meet expected demand growth. We have a long track record of making disciplined capital investments to enhance our leadership position while maintaining a strong balance sheet and returning excess cash to shareholders. Geismar 3 is an exceptional opportunity to deliver on our long-term strategy to enhance our position as the methanol industry leader,” Floren added. (RKS)

Fibre2Fashion News Desk – India