Methanex Buys 90% of Titan Methanol Plant for US$79mn
Canadian methanol company Methanex has bought 90% of the 850,000-ton/year (t/y) Titan methanol plant in Trinidad from Beacon Energy and BP for US$79mn plus debt, bringing its ownership to 100%, the company said in a statement.
Methanex bought 10% of the plant in late 2000, and in 2001 agreed with Beacon on a purchase option for Beacon's 75% stake. The option expired at the end of this year, Methanex president and CEO Pierre Choquette said in a conference call Friday. Methanex bought the remaining 15% from Britain's BP, and also negotiated with the lenders - a group of 15 banks and export credit agencies - to relax lending terms, Choquette said. The acquisition will mean Methanex pays approximately US$29mn of limited recourse long-term debt related to the Titan plant, the statement said. Total debt related to Titan after the repayment will be approximately US$194mn. The acquisition is a "perfect fit with our strategy of low cost, global market leadership, and operating excellence," Choquette said.
Methanex now has three plants in Latin America and the Caribbean that will impact results by 2005 - Titan, the 1.7 million t/y Atlas project under construction in Trinidad and due to start operations in early 2004, and an 840,000t/y expansion to its plant in southern Chile, due early 2005. Trinidad and Chile operations will now produce 5.7million t/y by themselves, equal to Methanex's total output in 2002, Choquette said. Titan was built between 1997 and 1999, and in 2002 was onstream for 98% of the time, making it highly reliable. The plant has 15 year supply contracts in place for natural gas and oxygen. 30% of output is marketed at a fixed price, and all production can enter Europe and North America on a duty free basis. Methanex has been marketing 100% of production since agreeing on the purchase option with Beacon, earning a 3% commission. The acquisition means it will now earn the full margin, Choquette said.
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