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Gas supply crunch forces Methanex to shut down plant in Egypt

A Methanex operation in Chile.


Methanex Corp.'s majority owned methanol production facility in Egypt is being idled temporarily due to continuing constraints in the supply of natural gas.

Vancouver-based Methanex said on Wednesday its joint venture operation, Egyptian Methanex Methanol Co. SAE – or EMethanex – has been idled and gas deliveries will likely not be resumed until the end of July because of the priority allocation of the supply to meet peak summer electricity demand.

The facility had been temporarily idled on June 12 and it was anticipated that operations would resume shortly thereafter. But higher seasonal electricy demand has put the kibosh on that plan, said the company.

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"Methanex is working with its gas supplier and other stakeholders to minimize the impact of the shutdown," it said.

Methanex is the operator and majority shareholder of EMethanex with a 50-per-cent stake in the company. The plant, located in Damietta on the Mediterranean Sea, can produce 1.3 million tonnes of ethanol a year.

Methanex is the world's largest producer and distributor of methanol and has facilities in five other countries, including Canada and the United States.

Methanol is primarily used as an ingredient in plastics and paints but is increasingly finding new markets as a fuel additive.

The plant in Egypt supplies both local and global markets.

Methanex has had problems in the past with its natural gas supply in Egypt due to political instability.

Last year, Methanex decided to move a methanol plant from Chile to Louisiana to take advantage of North America's abundant supply of low-cost natural gas.

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High-growth China is a key market for the company and some analysts predict it will become the largest consumer of ethanol in the coming years.


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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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