Post on 14-Feb-2017
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Global Methanol Outlook: Capacity Calling
Prepared forPrepared for
16th IMPCA Asian Methanol ConferenceOctober 30 – November 1, 2013
Singapore
By:Mark Berggren
Methanol Market Services Asia Manhattan House, 151 Chin Swee Road
Level 9‐07, Singapore 169876Phone: +65 6465 2720
E‐mail: services@methanolmsa.com
Methanol Market Services Asia (MMSA)
Today’s Topics
• The Global Methanol Balance to 2018– Main Drivers – China and Energy Intermediate Use– Regional Balancesg
• Asia ex China• Middle East• Europe• North America• South America • Russia• Africa
• Methanol Use and EconomicsA i A id O i
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
– Acetic Acid Overview– MTO, gasoline blending
• Methanol Pricing and Margins
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Today’s Takeaway Points
• Methanol markets remain globally connected, driven by Chinese behavior
– Use as an “energy intermediate” supported by “low coal, natural gas, high crude” economics
• MTO, gasoline blends, DME in China todayMTO, gasoline blends, DME in China today• MTG gaining interest• Even power generation shows economic promise
• New markets eventually dwarf current sizes– Impacts everyone in the global industry from hydrocarbon owners to methanol
consumers• Marginal buyer increasingly MTO vs DME• Conventional methanol derivatives will need to absorb cost increases
• Must think differently, critically, and about scale and efficiency– Must locate and persuade “right” hydrocarbon owners to participate
• North American opportunity based on shale gas
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
pp y g• Coal remains abundant in China• Middle East focusing on downstream integration• Southeast Asia and Africa offer opportunity and challenge
• More capacity to produce needed to foster energy applications• Methanol margins will support investment despite being bounded on
top by energy demand
MMSA – Global Insight, Asian Perspective™
• 10th Year of Operation, based in Singapore– Employee owned, Independent– Dedicated Consultants with over 45 years of
Methanol industry experience– Over 200 Client relationships globally
• Multi-Client Services– Methanol & Derivative Analysis
• Methanol, Formaldehyde, Acetic Acid, MTBE, MMA, Energy Use in global detail
– Methanol Notes™• Topics of relevance in brief, weekly
– MMSA Weekly Methanol Analysis• Global market analysis and price assessment every
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
• Global market analysis and price assessment every Friday Singapore time
– China Monthly Methanol Analysis (CMMA)• Project Services
– Market and Technical Due Diligence Support– Bankable Project Assessments, Valuation
• IMPCA Asian Methanol Conference
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Methanol Supply and Production
• Methanol is almost exclusively made in regions where low cost feedstocks are available
– The result of a strategy to maximize competitiveness and ensure cashThe result of a strategy to maximize competitiveness and ensure cash flow at cycle bottoms
• China developing industry on higher cost, but competitively priced coal feedstocks
– Demand for methanol beyond capability/willingness of international community to supply
– Demand into applications which can bear the cost (energy)
• A mini-renaissance in North America
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
– Natural gas in abundance– First signs of energy based demand
• Long Term – Need More Projects
China clearly leading global additions to methanol capacity
70,000
80,000
Supply Capacity for Methanol by Region 2008 - 2018E
30,000
40,000
50,000
60,000
70,000
-000
-ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
-
10,000
20,000
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Asia North America South America Europe Rest of World Middle East
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Chinese need Methanol for Gasoline, Olefins
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Methanol Demand
• Demand remains separated geographically from supply centersChi th i li ti d fi ROW• China growth in energy applications dwarfing ROW
• Needs becoming more diverse as scale increases– Integration– Logistics– Specifications
• Long Term – China and India traditional derivatives, China and US energy use have potential
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
China and US energy use have potential
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Asia (China, then India) Remains the Source of Most Growth in Methanol Demand
70,000
80,000
Demand for Methanol 2008 - 2018E
30,000
40,000
50,000
60,000
-000
-ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
0
10,000
20,000
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Asia North America South America Europe Rest of World China
MTO, Gasoline blending changing the profile of methanol demand
Methanol Use - WorldBy Derivative
2018E95.59
million metrictons
201260.60
million metric tons
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Formaldehyde Acetic Acid Methyl tert-Butyl Ether (MTBE)Methyl Methacrylate Dimethyl terephthalate (DMT) Methanethiol (Methyl Mercaptan) Methylamines Methyl Chloride (Chloromethane) Gasoline Blending & CombustionBiodiesel DME Fuel CellsMethanol-to-Olefins Others
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Methanol Trade
• Deep sea methanol trade connects continents, markets– Limits price excursions via arbitrage
• Current market situation exemplifies several prior precedentsCurrent market situation exemplifies, several prior precedents
• Patterns are dynamic– Hindered, unavailable capacity– Iranian sanctions– Protectionism– Investment in downstream applications
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
MeOH Made in Low Cost Feed Zones
EuropeCanada
Russia
Middle East
ChinaEurope
Egypt
UnitedStates
Trinidad&
VenezuelaEquatorial
Guinea
Libya
SoutheastAsia
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Chile NewZealand
Bubble Size Proportional to 2013E Capacity to Produce Methanol
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Much meOH demand remains apart from supply
Russia
Europe
Middle East
ChinaUnitedStates
SoutheastAsia
Europe
JapanKorea
India
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Bubble Size Proportional to 2013E Methanol Demand
2010, 2011, 2012 Methanol Trade Flow(Bubble Size Proportional to Capacity to Produce Methanol)
381 231,146, 1,133, 925 From
North10 30Canada
1,486, 1,342, 1,436 Russia
56, 104, 163
4,361, 4,644, 4,450
384, 366, 358513,588
635
381, 23,20
1,107, 1,048, 841
7,153, 7,642, 6,692
752, 687, 867
191, 19, 0
NorthAmerica
58, 28, 0
10, 30,60
1,033, 1,389, 1,429
ToNortheast
AsiaFromChile
EquatorialGuinea
Libya
9, 1, 41,047, 1,055, 1,308
ChinaMiddle East
Trinidad&
Venezuela
SoutheastAsia
436, 647Egypt 1,257, 1,470,
1,565
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
* Americas Supply * Persian Gulf Supply * Other Supply
38, 21, 0
Chile NewZealand
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Methanol Supply and Demand
• Markets should be oversupplied on paper, but are tight in practiceE h i h i h t i ti• Each region has unique characteristics
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Global Operating Rates: Rising after 2013, “hindered” capacity masks effective run rates
95%
100%
120 000
140,000
Methanol Supply and Demand - World4Q2013 Update
Forecast
70%
75%
80%
85%
90%
40,000
60,000
80,000
100,000
120,000
Thou
sand
Ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
60%
65%
-
20,000
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Effective)Op Rates (Based on Eff Capacity - Right Axis) Op Rates (Based on NP Capacity - Right Axis)
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Broad Asia ex China Next Largest and Most Swiftly Growing Region
• Most growth by investment in conventional90%
100%14,000
Methanol Supply and Demand - Asia (Less China)4Q2013 Update
Forecast conventional methanol derivative production
• Upside should certain countries mimic and/or embrace Chinese energy use of methanol
• Region less self sufficient than China due to higher 20%
30%
40%
50%
60%
70%
80%
90%
4,000
6,000
8,000
10,000
12,000
Thou
sand
Ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
overall feedstock cost
• One new facility is anticipated in global balance
0%
10%
-
2,000
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
Middle East to Remain Export Focused
• Natural gas values prevent
i f90%
100%20,000
Methanol Supply and Demand - Middle East4Q2013 Update
Forecastconstruction of export oriented methanol facilities
• Trend towards downstream integration will continue
• Iranian production will recover eventually, 20%
30%
40%
50%
60%
70%
80%
90%
(5,000)
-
5,000
10,000
15,000
Thou
sand
Ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
yhowever new projects in pipeline face delays0%
10%
(15,000)
(10,000)
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
European Demand Increasingly Reliant on Imports
• Most production high cost, supply options eventually90%
100%
9 000
10,000
Methanol Supply and Demand - Europe4Q2013 Update
options eventually lead to low operating rates, further rationalization possible
• Economic problems in southern Europe not expected to derail growth in20%
30%
40%
50%
60%
70%
80%
90%
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Thou
sand
Ton
nes
Forecast
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
derail growth in other regions, although overall demand growth miniscule
0%
10%
-
1,000
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
North America Demand Grows More Slowly than Supply
• Projects in TX, LA to increase US self sufficiency
120%
9 000
10,000
Methanol Supply and Demand - North America4Q2013 Update
• Investment in derivative capacity plus slowly improving economy to drive growth
• South American production to provide checks on US exports of
20%
40%
60%
80%
100%
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Thou
sand
Ton
nes
Forecast
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
methanol• Domestic
demand, export growth imperative
0%
20%
-
1,000
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
South America Supply Growth Stunted
• Chile and Trinidad lead chorus of f d k l90%
100%15,000
Methanol Supply and Demand - South America4Q2013 Update
Forecastfeedstock supply blues
• “You get what you pay for” – cheap gas no more
• Brazil? Perhaps, but likely past 2018
• Future downstream20%
30%
40%
50%
60%
70%
80%
90%
(5,000)
-
5,000
10,000
Thou
sand
Ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
downstream investment limited
0%
10%
(10,000)2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
Russian Demand Growing Along with Production
• Russian archipelago has all ingredients for90%
100%
6 000
7,000
Methanol Supply and Demand - Russia4Q2013 Update
ingredients for globally competitive wood panel industry, though investment at deliberate pace
• Exports (mostly to Europe) will remain marginal given lower cost structures of Middle East and
20%
30%
40%
50%
60%
70%
80%
90%
(1,000)
-
1,000
2,000
3,000
4,000
5,000
6,000
Thou
sand
Ton
nes
Forecast
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Middle East and Africa
• Nat gas at competitive rates imperative for project viability
0%
10%
(3,000)
(2,000)
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
African Methanol Production Offers Potential, With Risks
• Resource richness matched by geopolitical90%
100%4,000
Methanol Supply and Demand - Africa4Q2013 Update
Forecast geopolitical instability
• Projects proposed in Sub-Saharan Africa competing with LNG, power generation for resources
– Nigeria, Ghana, Mozambique
• Few plans for20%
30%
40%
50%
60%
70%
80%
90%
(1,000)
-
1,000
2,000
3,000
Thou
sand
Ton
nes
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
• Few plans for downstream investment0%
10%
(3,000)
(2,000)
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E
Total Demand ProductionProduction Capacity (Actual) Production Capacity (Adjusted)Net Trade Op Rates (Based on Adj Capacity - Right Axis)
“Energy Intermediate” Role now Commercial Reality
ApplicationCurrent Methanol
Demand Potential*
Methanol Demand
Developing Methanol Markets Summary
(2013E, -000- Tons) (-000- Tons)Alternative Fuels Gasoline Blending & Combustion 9224 40,000 - 50,000 Biodiesel 1218 25,000 - 40,000 Dimethyl Ether (DME) 4734 10,000 - 15,000 Power Generation & Others < 1 40,000 - 60,000
Fuel Cells 7 3,000 - 8,000
Methanol to Olefins 5886** 30 000 40 000
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Methanol-to-Olefins 5886 30,000 - 40,000
Methanol-to-Gasoline 200*** 15,000 - 35,000* Rough estimates of peak demand calculated as replacement percentage of existing global demand as a substitute** Five commercial-scale MTO plants are operating in China as of April 2013. Several projects are still in the pipeline*** ExxonMobil MTG plant in China commissioned in 2009
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
MeOH Remains Competitive vs. Naphtha in Olefins Creation
3000
Ethylene Cash Cost vs. Feed Type Hypothetical Asia, 1.2 tonnes propylene/tonne ethylene
0
500
1000
1500
2000
2500
USD
per metric ton
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
‐1500
‐1000
‐500
0
Jan‐00
Jul‐0
0
Jan‐01
Jul‐0
1
Jan‐02
Jul‐0
2
Jan‐03
Jul‐0
3
Jan‐04
Jul‐0
4
Jan‐05
Jul‐0
5
Jan‐06
Jul‐0
6
Jan‐07
Jul‐0
7
Jan‐08
Jul‐0
8
Jan‐09
Jul‐0
9
Jan‐10
Jul‐1
0
Jan‐11
Jul‐1
1
Jan‐12
Jul‐1
2
Jan‐13
Jul‐1
3
CC via meOH CC via Naphtha CCmeOH‐CCNaphtha
Methanol Adding Value in Blends with Chinese Gasoline since 2008
9,000
10,000
Methanol Prices vs Methanol Energy and Volume Equivalences: Gasoline Blending
Methanol in Gasoline Blending: Volume-Equivalent Basis
3,000
4,000
5,000
6,000
7,000
8,000
Pric
es (C
NY
/ met
ric to
n)
Methanol in Gasoline Blending: Energy-Equivalent Basis
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
1,000
2,000
East China Domestic Price South China Domestic Price
Methanol Equivalent Price - Volume Basis Methanol Equivalent Price - Energy Basis
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Scale of Consumers Increasing
End User Largest Single Site Annual RequirementAnnual Requirement,
‐000‐mt
MTO 1800
DME 280
Gasoline 300
Acetic Acid 600
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Acetic Acid 600
Formaldehyde 75
MTBE 50
MMA 90
Methanol Prices Bounded
• Limited on high side by derivative affordability– DME is the “marginal buyer” of product
• DME economics related to crude via LPG link
– MTO increasingly important• Limited on low side by marginal cost of supply
– Firmly located in China, based on coal feed• Coal economics are less directly related to crude
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Coal Prices in China Have Corrected as Supply Scale and Logistics Capabilities Increase
70
80
140
160
Premium Coal vs. Crude Oil (Monthly Prices to Oct'13)
Crude Oil, Brent, USD/bbl
30
40
50
60
70
60
80
100
120
140
USD per M
MBtu
USD
per
ton
or p
er b
bl
Coal, Datong Premium Mix, FOB QHD Port
Crude Oil, Brent, USD/MMBtu
Coal, Datong Premium Mix, FOB QHD Port, USD/MMBtu
Natural Gas, NYMEX-Henry Hub
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
0
10
20
0
20
40
Jan-
03M
ay-0
3Se
p-03
Jan-
04M
ay-0
4Se
p-04
Jan-
05M
ay-0
5Se
p-05
Jan-
06M
ay-0
6Se
p-06
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Broad Spread of Costs in China
$500
MeOH Delivered Cash Cost ‐ Early Sep 2013 Coastal China Main Ports, 2013 Net Available Capacity*
China Adjusted Domestic Prices (Sep'13, Avg East/South China less VAT)
$200
$300
$400
USD
per
met
ric to
n
China Adjusted Import Prices(Sep'13, CFR plus duty, throughput)
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
$0
$100
0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 55000 60000Cumulative Available Capacity*, -000- metric tons
2013E China Demand (Sep'13 Update)
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Aggregate cost of delivered product rising, improving natural gas affordability ex China
$250.00
Weighted Average Cash Costs Delivered Coastal China Main Ports, USD per metric ton
$200.00
$210.00
$220.00
$230.00
$240.00
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
$170.00
$180.00
$190.00
Apr
-09
May
-09
Jun-
09Ju
l-09
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10Fe
b-10
Mar
-10
Apr
-10
May
-10
Jun-
10Ju
l-10
Aug
-10
Se p
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11Fe
b-11
Mar
-11
Apr
-11
May
-11
Jun-
11Ju
l-11
Au g
-11
Sep
-11
Oct
-11
Nov
-11
Dec
-11
Jan-
12Fe
b-12
Mar
-12
Apr
-12
May
-12
Jun-
12Ju
l-12
Aug
-12
DME affordability has large influence on China, global methanol prices
1400
1600
Methanol Volume vs. Value - ChinaMid to Late September '13
A P i f E t Chi E T k
400
600
800
1000
1200
Met
hano
l "Af
ford
abili
ty,"
USD
/MT MTBE
Methylamines
Average Price for East China, Ex-Tank,Average August '13; 1 USD = 6.12 CNY
Chloro-methane
Gasoline Blending
(equal energy)
Average Price for East China, Ex-Tank,Average Septembert '13; 1 USD = 6.12 CNY
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
0
200
0 6000 12000 18000 24000
M
Cumulative Consumption of MeOH in China, 2013E (June '13 Update),-000- tons, Select
AAFormaldehyde MMA
DME
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
Global Methanol Prices to Support Investment Projects in China, Elsewhere
500
600Global Methanol Pricing
Forecast
100
200
300
400
US Dollars per metric ton
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E
Delivered Cost Parity Imports to China
Methanol China Spot, Avg. CFR China Main Ports USD/metric ton
Methanol US Posted Contract Index, Avg Realized Price FOB USGC USD/metric ton
Methanol West Europe Contract (T2), Avg Realized Price FOB Rotterdam USD/metric ton
$40
$45
D Billions
Methanol Value Creation from 1997
17th Consecutive Year of Value Creation
$15
$20
$25
$30
$35USD
Gain
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
$0
$5
$10
Cumulative Estimate ‐ China Cumulative Estimate ‐Middle East
Gain Pain
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference
MMSA Balances to 2030 – Projects Needed
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
Today’s Takeaway Points
• Methanol markets remain globally connected, driven by Chinese behavior
– Use as an “energy intermediate” supported by “low coal, natural gas, high crude” economics
• MTO, gasoline blends, DME in China todayMTO, gasoline blends, DME in China today• MTG gaining interest• Even power generation shows economic promise
• New markets eventually dwarf current sizes– Impacts everyone in the global industry from hydrocarbon owners to methanol
consumers• Marginal buyer increasingly MTO vs DME• Conventional methanol derivatives will need to absorb cost increases
• Must think differently, critically, and about scale and efficiency– Must locate and persuade “right” hydrocarbon owners to participate
• North American opportunity based on shale gas
16th IMPCA 2013 AMC © MMSA Pte Ltd. All Rights Reserved.
pp y g• Coal remains abundant in China• Middle East focusing on downstream integration• Southeast Asia and Africa offer opportunity and challenge
• More capacity to produce needed to foster energy applications• Methanol margins will support investment despite being bounded on
top by energy demand
Mark Berggren – Methanol Market Services Asia (MMSA)
16th IMPCA 2013 Asian Methanol Conference