HOUSTON,April 29-Canadian methanol producer Methanex said on Thursday that it will continue to take advantage of what it sees as robust demand for methanol by increasing production globally.
In its first-quarter earnings, the company realised the highest volume of quarterly sales since the second quarter of 2007, CEO Bruce Aitken said in the company's earnings call, proclaiming that demand "passed pre-recession levels".
The uptick in sales translated into a $29.3m (?2.3m) net profit in the first-quarter, compared with a $18.4m net loss for the same time last year.
However, the company did have to buy 604,000 tonnes of methanol during the quarter - a 29% increase from fourth-quarter 2009 - to supplement lagging internal production stemming from an outage in Trinidad. The move lowered profits, an analyst said.
Methanex said it was positioning itself in the coming quarters to capitalise on higher methanol demand by increasing output in Egypt, Chile, New Zealand and Canada.
More than one-quarter of the 4m tonnes/year of global capacity scheduled to come on line this year would come from Methanex's new 1.3m tonne/year plant in Egypt.
Methanex's CEO said the project was not being rushed and that output was scheduled to begin in the third quarter of this year not the second quarter as the company had previously announced.
In Chile, natural gas supply remains stable from its previously volatile situation and has run at a 20-25% improvement from 2009, Aitken said.
Methanex said production in Chile would be reduced in the second quarter due to a pullback in natural gas supply during the southern hemisphere winter.
But the company expected two of its four Chilean plants to be running at higher rates in the third quarter and would eventually return the site to full operation.
Improved natural gas supply in New Zealand was also providing the company with a positive outlook for its two plants there after it restarted them in 2008 and expected to "possibly start more capacity there in the coming years", Aitken said.
The attractive price of natural gas amid the optimistic demand projections also had Methanex considering the restart of its Canadian plant in Medicine Hat, Alberta.
The company had been entertaining the move since natural gas prices remained low in 2009 while crude oil values spiked.
Aitken characterised the plant as an attractive, flexible option for the company while natural gas prices stay economically favourable as a feedstock.
"That's the opportunity to source gas in western Canada and turn it into methanol, which trades like oil," Aitken said.
"It's about a six month schedule to return it to operational status," he said. "During the summer we will make that decision. It's probably not a smart thing to start it up in the middle of winter. In my mind this is a spring start in 2011."
In its first-quarter earnings, the company realised the highest volume of quarterly sales since the second quarter of 2007, CEO Bruce Aitken said in the company's earnings call, proclaiming that demand "passed pre-recession levels".
The uptick in sales translated into a $29.3m (?2.3m) net profit in the first-quarter, compared with a $18.4m net loss for the same time last year.
However, the company did have to buy 604,000 tonnes of methanol during the quarter - a 29% increase from fourth-quarter 2009 - to supplement lagging internal production stemming from an outage in Trinidad. The move lowered profits, an analyst said.
Methanex said it was positioning itself in the coming quarters to capitalise on higher methanol demand by increasing output in Egypt, Chile, New Zealand and Canada.
More than one-quarter of the 4m tonnes/year of global capacity scheduled to come on line this year would come from Methanex's new 1.3m tonne/year plant in Egypt.
Methanex's CEO said the project was not being rushed and that output was scheduled to begin in the third quarter of this year not the second quarter as the company had previously announced.
In Chile, natural gas supply remains stable from its previously volatile situation and has run at a 20-25% improvement from 2009, Aitken said.
Methanex said production in Chile would be reduced in the second quarter due to a pullback in natural gas supply during the southern hemisphere winter.
But the company expected two of its four Chilean plants to be running at higher rates in the third quarter and would eventually return the site to full operation.
Improved natural gas supply in New Zealand was also providing the company with a positive outlook for its two plants there after it restarted them in 2008 and expected to "possibly start more capacity there in the coming years", Aitken said.
The attractive price of natural gas amid the optimistic demand projections also had Methanex considering the restart of its Canadian plant in Medicine Hat, Alberta.
The company had been entertaining the move since natural gas prices remained low in 2009 while crude oil values spiked.
Aitken characterised the plant as an attractive, flexible option for the company while natural gas prices stay economically favourable as a feedstock.
"That's the opportunity to source gas in western Canada and turn it into methanol, which trades like oil," Aitken said.
"It's about a six month schedule to return it to operational status," he said. "During the summer we will make that decision. It's probably not a smart thing to start it up in the middle of winter. In my mind this is a spring start in 2011."
