After decisions to idle plants in Trinidad and Chile, Methanex is “evaluating all capital and operating spending,” including its third methanol plant in Geismar, Petrochemical Update reports.
The company blames weakening demand for the decision. Methanex CEO John Floren says a reduction in manufacturing in countries impacted by Covid-19 could mean lower demand in the second quarter of 2020. “As a result,” he says, “we are reducing production at our methanol facilities where we have flexibility in our gas agreements.”
Methanex had announced in July a final investment decision to build a 1.8-million-ton methanol plant in Geismar, adjacent to its other two plants. The estimated project cost for the project was $1.4 billion.
“Given the uncertainty in the global economy and challenging commodity price environment,” Floren tells Petrochemical Update, “we are taking steps to strengthen our balance sheet.”
Methanex is the world’s biggest methanol producer.