Methanex to close T&T methanol plant indefinitely

Cana­da’s Methanex Cor­po­ra­tion said that it will idle its Ti­tan plant on the Point Lisas In­dus­tri­al Es­tate in­def­i­nite­ly, af­ter fail­ing to se­cure a new nat­ur­al gas sup­ply con­tract with the whol­ly state-owned Na­tion­al Gas Com­pa­ny (NGC).

In a news re­lease is­sued yes­ter­day, Methanex said Ti­tan’s ex­ist­ing nat­ur­al gas con­tract ex­pires in three months (Sep­tem­ber), at which time the plant will be put in­to preser­va­tion mode “to pro­vide op­tion­al­i­ty for a fu­ture restart should con­di­tions ma­te­ri­al­ly im­prove.”

As a re­sult, Guardian Me­dia un­der­stands that about 140 per­ma­nent em­ploy­ees would like­ly be af­fect­ed by the com­pa­ny’s de­ci­sion. This does not in­clude con­trac­tors and ser­vice sup­pli­ers. Guardian Me­dia un­der­stands that the com­pa­ny held a meet­ing yes­ter­day with its em­ploy­ees and will en­gage in a con­sul­ta­tive process with them on the next steps mov­ing for­ward.

Ti­tan is the sec­ond of Methanex’s two methanol plants on the Es­tate to go in­to idle mode.

In Sep­tem­ber 2024, the At­las methanol plant was idled fol­low­ing the ex­pi­ra­tion of its 20-year nat­ur­al gas sup­ply agree­ment. The plant re­mains in a pre­served state. The Ti­tan plant has a 860,000 tonnes a year ca­pac­i­ty, while the At­las fa­cil­i­ty has a ca­pac­i­ty of 1,650,000 tonnes a year ca­pac­i­ty.

In the news re­lease, pres­i­dent and CEO of Methanex Cor­po­ra­tion, Rich Sum­n­er, said, “We have a long his­to­ry in T&T with an out­stand­ing or­gan­i­sa­tion that has played an im­por­tant role in our com­pa­ny’s his­to­ry. This dif­fi­cult de­ci­sion re­flects our fo­cus on pre­serv­ing long-term share­hold­er val­ue in a chal­leng­ing en­vi­ron­ment where the struc­tural­ly tight gas sup­ply and de­mand bal­ances in T&T are mak­ing op­er­a­tions com­mer­cial­ly un­vi­able.

“Ahead of this de­ci­sion, we en­gaged ex­ten­sive­ly with the Gov­ern­ment of T&T and the Na­tion­al Gas Com­pa­ny, and we recog­nise and ap­pre­ci­ate their on­go­ing ef­forts to ad­dress the coun­try’s gas sup­ply chal­lenges. We will mon­i­tor fu­ture de­vel­op­ments close­ly, with a view to re­assess­ing con­di­tions and our po­si­tion over the com­ing years. We are now fo­cused on sup­port­ing our team mem­bers dur­ing this chal­leng­ing pe­ri­od and safe­ly idling and pre­serv­ing the fa­cil­i­ty.”

The com­pa­ny not­ed that Methanex does not ex­pect to in­cur ma­te­r­i­al cash costs as a re­sult of the de­ci­sion and any up­dates to pro­duc­tion or fi­nan­cial guid­ance will be re­leased with Methanex’s reg­u­lar sec­ond quar­ter fi­nan­cial com­mu­ni­ca­tions sched­uled for Ju­ly 28.

Dri­ver: News should not come as a sur­prise

In a post yes­ter­day, for­mer CEO of the En­er­gy Cham­ber, Dax Dri­ver, said Methanex clear­ly sig­nalled the risk that it would idle the Ti­tan plant ear­li­er this year, when the CEO ad­vised their share­hold­ers that there was a pos­si­bil­i­ty that they would not be “able to se­cure ad­di­tion­al nat­ur­al gas on com­mer­cial­ly ac­cept­able terms … to en­able us to op­er­ate at ca­pac­i­ty or at all.

“Nev­er­the­less, when the ac­tu­al news breaks of an­oth­er ma­jor multi­na­tion­al com­pa­ny ceas­ing petro­chem­i­cal pro­duc­tion, the risk on pa­per sud­den­ly be­comes re­al, es­pe­cial­ly for the hun­dreds of em­ploy­ees and thou­sands of con­trac­tor work­ers who now face an un­cer­tain fu­ture. Com­ing on the top of the clo­sure of the Nu­trien am­mo­nia plants sev­en months ago, this is a ma­jor blow to Trinidad’s petro­chem­i­cal in­dus­try… Nu­trien is look­ing for a buy­er for its Trinidad as­sets.”

Dri­ver not­ed that fac­ing low vol­umes of gas sup­ply from the up­stream com­pa­nies through the rest of 2026 and 2027, the Na­tion­al Gas Com­pa­ny (NGC) has tak­en a de­ci­sion to fo­cus on the short-term rev­enue that it can se­cure from LNG sales to in­ter­na­tion­al mar­kets.

“It has on­ly of­fered short terms con­tracts to the Point Lisas plants, at high­er prices. Three of the ma­jor cus­tomers (Pro­man, PLNL, and Yara/Trin­gen) have signed these con­tracts for 2026 and have con­tin­ued to op­er­ate for now, while two (Nu­trien and Methanex) have de­cid­ed to cease op­er­a­tions. Every com­pa­ny will have dif­fer­ent busi­ness dri­vers, in­clud­ing dif­fer­ent op­tions of where to de­ploy their cap­i­tal around the world. For Methanex and Nu­trien, in­vest­ing in Trinidad and con­tin­u­ing to op­er­ate un­der the gas con­tracts on of­fer, clear­ly did not make eco­nom­ic sense,” he said.

“The dan­ger of the cur­rent strat­e­gy for Trinidad & To­ba­go is that if and when the in­creased gas pro­duc­tion be­gins to flow in 2028, there will no longer be the port­fo­lio of down­stream petro­chem­i­cal plants avail­able to take the gas. Plants can­not be sim­ply brought back in­to pro­duc­tion with the flick of a switch. Ma­jor in­vest­ments will be need­ed in main­te­nance and up­grades, and the longer plants are left idle, the big­ger the in­vest­ment need­ed,” he added.

In a state­ment is­sued yes­ter­day the En­er­gy Cham­ber not­ed that Methanex en­gaged ex­ten­sive­ly with the Gov­ern­ment of Trinidad and To­ba­go and the NGC ahead of this de­ci­sion.

“The Cham­ber looks for­ward to con­tin­ued en­gage­ment be­tween all par­ties with a view to cre­at­ing the con­di­tions that would al­low these fa­cil­i­ties to re­sume op­er­a­tions. We note that Methanex has pre­served both plants in a state that pro­vides op­tion­al­i­ty for a fu­ture restart, and we wel­come that com­mit­ment. The En­er­gy Cham­ber re­mains avail­able to sup­port any con­struc­tive process that ad­vances the long-term vi­a­bil­i­ty of the petro­chem­i­cal sec­tor in Trinidad and To­ba­go,” it said.