Methanex purchases Texas-based methanol business
By Collin Gallant on September 10, 2024.
@@CollinGallant Methanex is set to get bigger and also strike out into ammonia production with the purchase of a rival’s Texas-based methanol business, it announced Monday. A deal to buy OCI Global’s international methanol business in an agreement valued at US$2.05 billion, including assumed debt would expand production by one-fifth with the Vancouver-based methanol producer that operates a facility in Medicine Hat. It would also add the companies first ammonia production with the Beaumont, Tex. plants, as well as related marketing wing. “This is a unique opportunity to create value by acquiring two highly attractive North American methanol assets that will further strengthen our global production base,” said Rich Sumner, the president and CEO of Methanex. “The Beaumont plants benefit from access to North America’s abundant and favourably-priced supply of natural gas feedstock, and are expected to increase our global methanol production by over 20 per cent.” OCI’s main Beaumont facility has an annual production capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia. It was restarted in 2011 and has since seen US$800 million in full site refurbishment and debottlenecking. A second facility refers to OCI’s 50 per cent stake in a plant run as a joint venture with “Natgasoline LLC”. It was commissioned 2018 with an annual capacity of 1.7 million tonnes of methanol, making Methanex’s share 850,000 tonnes.For comparison, the Medicine Hat methonal plant has an annual capacity of about 650,000 tonnes.This year, Methanex commissioned it’s Geismar 3 plant in Louisiana, an 1.8 million tonne per year facility. The deal also includes an idled 1-million tonne methanol facility in Delfzijl, Netherlands, which is currently off-line due to high feedstock prices in Europe. Combining the two divisions could create US$30 million in efficiencies, according to Methanex which engaged Deutsche Bank and RBC Capital Markets to advise it on the sale. The deal, subject to shareholders and regulatory approval, could close in early 2025, said Sumner. Under the agreement, Methanex will pay OCI US$1.15 billion in cash, issue the company 9.9 million Methanex common shares valued at US$450 million and assume US$450 million in debt and leases. OCI will own about a 13 per cent stake in Methanex once the transaction is complete. – With files from the Canadian Press 13-12
