Methanex will restart construction on a major expansion of its plant site in Louisiana, the global methanol producer announced late last week.
Construction on the $1.3 billion project is expected to resume in October, with commercial operations targeted for the end of 2023 or early 2024.
The company had paused major construction on the Geismar 3 project last year during the initial turmoil on world markets caused by the COVID pandemic, but continued with some engineering work.
“The timing is right to restart construction on our Geismar 3 project as the methanol industry outlook is positive,” CEO John Floren in a release, noting that Geismar 3 will be one of the company’s lowest cost plants and have “one of the lowest CO2 emissions intensity profiles in the industry.”
Geismar 3 is the company’s only major growth capital project planned for the next few years, Floren said. The manufacturer expects global demand for the industrial anti-freeze, plastics additive and alternative fuel to grow by 20% over the next five years, or about 16 million tons. Analysts say only 14 million tons of new production capacity, including Geismar 3, is set to come online over that timeframe.
The expansion’s budget is about $100 million less than previous estimates.
New cash flow and financial position allows Methanex to reduce some financing vehicles for the project.