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© METHANEX CORPORATION 2014
John Floren, President & CEO
2014 Washington Methanol Policy Forum
March 18, 2014
© METHANEX CORPORATION 2014
Methanol...
3
• Is primarily produced from natural gas
• Has diversified end uses
Formaldehyde Acetic Acid Wood Industry, Pharmaceuticals, Automotive Fleece, Adhesives, Paints
Dimethyl Terephthalate Methyl Chloride Recyclable plastic bottles Silicones
Energy & MTO
(40% of Demand; High Growth) Traditional Uses (60% of Demand)
Fuel Blending
MTO Methanol-to-
Olefins
Marine Fuels
DME (di-methyl-ether)
MTBE
© METHANEX CORPORATION 2014
Fast Paced Demand Growth
4
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
Chemical MTBE/TAME Fuel DME MTO/MTP (Merchant)
(000s tonnes)
2014 – 2017 CAGR:
Energy: 11.2%
Total: 7.5%
Source: IHS Chemical, January, 2014. Excludes integrated methanol demand for methanol to olefins and propylene
• Projected 7.5% CAGR, led by energy applications
2002 – 2013 CAGR:
Energy: 9.1%
Total: 5.2%
Note:
1 tonne
methanol =
332.6 US
gallons
© METHANEX CORPORATION 2014 5
0
20
40
60
80
100
120
2001 2006 2011 2016 2021
Supply ROW ex-China China Required for Balance Total New Supply Increase Demand
New Plants:
1. Latin America
2. Middle East
3. Asia **Most North American
plants close
New Plants:
1. Middle East
2. Asia
3. Latin America
New Plants:
1. USA
2. Iran
3. Russia/Africa
4. LA
5. Other
New Plants:
1. Methanex Egypt
2. 4 - 5 MMT USA New
3. 5 - 6 MMT re-start
(Mainly North America
but also New Zealand,
Libya, Azerbaijan)
Source: IHS December 2013– Demand figures exclude integrated Methanol to Olefins
(Mill
ion
to
nn
es p
er y
ear)
Methanol industry in USA revitalized
USA Methanol Production Resurgence
© METHANEX CORPORATION 2014
Potential for methanol based fuels in USA
• Produced at lower cost than oil based products like gasoline
• Reinvestment economics drive the long term methanol price
• Clean burning; produced from natural gas or any renewable carbon based feedstock
• Abundant feedstock
• Strategic benefits of energy security
• Methanol fuel is like ethanol and it’s low cost
• Easy to integrate into existing liquid transportation fuel infrastructure
• What’s needed?
• Government regulations that level the playing field and allow for true consumer choice. Not subsidies (e.g. Open Fuels Standard)
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© METHANEX CORPORATION 2014
• Relocating two plants from Chile to Louisiana
• Relocation offers significant capital savings and reduced project timeframe
• Geismar 1:
• Plant start up targeted for late 2014
• All plant and equipment on site
• One million tonnes of methanol/year
• ~1,000 construction jobs over two years
• ~130 permanent full-time, high-skilled jobs
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Methanex Growth: Relocations to Louisiana
© METHANEX CORPORATION 2014 8
Methanex Growth: Relocations to Louisiana
• Geismar 2
• Plant start up targeted for H1 2016
• One million tonnes of methanol /year
• Dismantling in progress
• ~1,500 construction jobs over two years
• ~35 permanent full-time, high skilled jobs
• Both projects budgeted at ~ $1.1 billion
• Opens the potential for rebuilding America’s chemical industry. Downstream economic benefits
© METHANEX CORPORATION 2014
• Attractive project attributes:
• 10-year natural gas contract with Chesapeake to supply one plant
• Significant capital and schedule savings vs. greenfield
• Louisiana: attractive business environment & large methanol consuming region
• Evaluating Other Opportunities
in North America
• Potential third relocation • Greenfield project in
North America
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Aerial photo of Geismar site
Methanex Growth: Relocations to Louisiana
© METHANEX CORPORATION 2014
Summary
•Methanol industry forecast to grow rapidly due to methanol’s growing
global use in energy applications
•Methanol offers a low-cost, clean route to US energy independence
and the foundation for other downstream industries
• Requires government support (not subsidies), to level the playing field
for using methanol as a fuel
• Underpins additional methanol projects and domestic job growth
•Methanex committed to growing in North America
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