Methanex Corp Places $593 Million West Australian Methanol Plant on Hold

www.bloomberg.com Fri, 14 Mar 2003, 09:31am EDT By Joe Carroll

Vancouver, March 13 (Bloomberg) -- Methanex Corp., the world's largest methanol producer, put on hold plans for a A$1 billion ($593.1 million) methanol plant in Western Australia because of rising costs.

Methanex is studying alternatives for supplying customers in Asia, the company said in a statement distributed by Business Wire. Vancouver-based Methanex is looking at other sites in Australia and may build capacity at smaller increments than originally planned to reduce costs.

This proposed development has become increasingly difficult to progress in its originally intended form,'' said Bruce Aitken, senior vice president for Methanex's Asia-Pacific operations, in the statement. For Methanex, the capital costs for a Greenfield project of this size have become disproportionately high.''

Methanex shares rose 6 cents to $8.91 in Nasdaq trading. The stock is up 22 percent from a year ago.

Methanol is used to make fuel components such as methyl tertiary butyl ether, or MTBE. It is also an ingredient in formaldehyde and acetic acid, which is used to make photographic film.

Methanex received environmental approval from the Australian government last month to build a methanol plant in the Burrup Peninsula that would produce 2 million metric tons annually. Construction had been slated to begin by mid-year. Methanol is derived from natural gas.