Methanex and Entropy Partner to Reduce Emissions in Methanol Production
Methanex (TSX:MX, NASDAQ:MEOH) and Entropy have partnered to invest in a Pre-FEED study for carbon capture, utilization and sequestration (CCUS) at Methanex's Medicine Hat, Alberta facility. The project aims to capture 400 tonnes of CO2 daily, with an estimated investment of CAD $100 million. A portion of the captured CO2 will produce 50,000 tonnes of additional methanol annually, while the remainder will be sequestered underground.
The collaboration leverages Entropy's proprietary carbon capture technology and Methanex's manufacturing expertise. Upon final investment decision, Entropy will construct and own the capture equipment, while Methanex will supply utilities, build tie-ins, and operate the equipment. The project is expected to create 200 construction jobs and several permanent positions, showcasing Canadian leadership in the low-carbon transition.
- Potential to capture 400 tonnes of CO2 daily, reducing greenhouse gas emissions
- Expected to produce 50,000 tonnes of additional methanol annually from captured CO2
- Creation of 200 construction jobs and several permanent positions
- Aligns with Methanex's goal to reduce global GHG emission intensity by 10% by 2030
- Demonstrates leadership in low-carbon transition and CCUS technology
- Significant investment of CAD $100 million (~USD $75 million) required for the project
- Project still in Pre-FEED stage, final investment decision pending
- Economic viability of the project yet to be fully evaluated
Insights
The collaboration between Methanex and Entropy for a carbon capture, utilization and sequestration (CCUS) project involves a significant investment of around
In the short term, this news might not significantly affect Methanex’s stock price, as it’s primarily an announcement of intent. However, in the long term, successful implementation could position Methanex as a leader in sustainable methanol production, potentially leading to higher valuations driven by investor confidence in their environmental, social and governance (ESG) strategies.
This announcement aligns well with global trends towards decarbonization and sustainable industry practices. The move by Methanex and Entropy to engage in a CCUS project places them in a favorable position in the eyes of stakeholders who prioritize ESG factors. The innovative use of captured CO2 to produce additional methanol not only reduces emissions but also adds value by creating a marketable by-product. For investors, it’s important to recognize that such technological advancements can lead to a competitive edge. However, the project's success hinges on various factors, including municipal support, access to carbon offset programs and economic viability assessments.
From a market perspective, Methanex’s proactive stance on emission reduction can enhance its brand reputation and attract ESG-focused investors, potentially increasing demand for its stock. Nonetheless, investors should monitor the outcomes of the Pre-FEED study and subsequent developments closely to gauge the practical impact on Methanex’s market position.
The partnership between Methanex and Entropy reflects a significant step towards achieving environmental sustainability within the methanol production industry. By targeting a daily capture of approximately 400 tonnes of CO2, this initiative supports broader climate goals and showcases a proactive approach to environmental responsibility. This project, if successful, could serve as a model for similar industries to adopt carbon capture and utilization technologies. The involvement of government support and alignment with carbon reduction programs are important elements that could aid in overcoming regulatory and financial hurdles.
In the context of environmental policy, achieving tangible progress in CCUS projects like this can enhance Methanex's compliance with future emissions regulations, potentially mitigating risks associated with regulatory changes. Investors should see this as a positive development, not only from an ethical standpoint but also from a risk management perspective, ensuring long-term operational viability amidst tightening environmental regulations.
Leading Canadian Companies Enter Pre-FEED for Carbon Capture Utilization and Sequestration Deployment in Alberta
VANCOUVER, British Columbia and CALGARY. Alberta, July 17, 2024 (GLOBE NEWSWIRE) -- Methanex Corporation (“Methanex”) (TSX:MX) (NASDAQ:MEOH), one of the world’s largest methanol producers and suppliers and Entropy Inc. (“Entropy”), a leader in carbon capture and storage solutions, have entered into an agreement to invest in a Preliminary Front-End Engineering and Design (“Pre-FEED”) study for carbon capture, utilization and sequestration (“CCUS”) deployment at Methanex’s Medicine Hat, Alberta facility. This collaboration will leverage Entropy’s proprietary modular post-combustion carbon capture technology and Methanex’s manufacturing expertise to utilize a portion of the captured CO2 to produce additional methanol, showcasing the leadership of two Canadian companies in the low-carbon transition. Upon final investment decision, Entropy will construct and own the capture equipment adjacent to Methanex’s facility and Methanex will supply the utilities, build the tie-ins to its facility and operate the capture equipment once commissioned.
Key Project Highlights:
- Emissions capture: targets approximately 400 tonnes of CO2 per day.
- Economic impact: involves an investment of approximately CAD
$100 million (~USD$75 million ), the largest portion of which will come from Entropy. The investment is expected to create about 200 construction jobs and several permanent jobs once operational. - Innovative use of CO2: a portion of the captured CO2 will be used as feedstock to produce approximately 50,000 tonnes annually of additional methanol, with the remaining CO2 permanently sequestered safely underground.
The Pre-FEED will also evaluate the economic viability of the project including access to pore space, carbon offtake agreements, municipal alignment, and funding from both Provincial and Federal carbon reduction programs.
“We’re excited to advance this first-of-its-kind carbon capture solution in North America in collaboration with Entropy,” said Mark Allard, Senior Vice President, Low Carbon Solutions (“LCS”), Methanex. “This project exemplifies Methanex’s commitment to reduce our global GHG emission intensity by
“We are pleased to be collaborating with Methanex, a global leader with Canadian roots, on this ground-breaking CCUS project,” said Mike Belenkie, President and CEO of Entropy. “Our CCS technology is designed to reduce carbon emissions to the atmosphere as economically as possible, making more projects like this one investable. Having successfully proven our technology at the Glacier Gas Plant in Alberta, the only gas-fired CCS facility in the world, this partnership with Methanex allows us to expand into carbon capture and utilization (”CCU“), reducing carbon emissions but also increasing productivity for our partners.”
“Alberta is proud to be a leader in CCUS technology and this project highlights our work in CCUS and energy diversification. We are working to phase out emissions and I’m thrilled that Methanex and Entropy have chosen to contribute to our carbon reduction goals in the Medicine Hat area. This will not just benefit the region, it will benefit Alberta and the world,” said the Honourable Danielle Smith, Premier of Alberta and MLA for Brooks-Medicine Hat.
“We’re excited about this project’s potential to create jobs and ensure long-term economic resilience in southeastern Alberta,” says Medicine Hat Deputy Mayor Ramona Robins. “It aligns with our strategy for energy transition as well as our vision to make Medicine Hat a local carbon capture hub.”
Methanex and Entropy are committed to collaborating with stakeholders throughout the project’s lifecycle to ensure its success and establish it as a landmark initiative for Alberta.
About Methanex Corporation
Methanex Corporation is one of the world’s largest producers and suppliers of methanol to major international markets in Asia Pacific, North America, Europe, and South America. The company’s methanol production sites are located in Canada, the United States, Trinidad, Chile, Egypt and New Zealand. Methanex is headquartered in Vancouver, Canada, and the company’s common shares trade on the Toronto Stock Exchange under the symbol MX and on the NASDAQ Global Select Market under the symbol MEOH. For more information, please visit www.methanex.com.
Inquiries:
Sarah Herriott
Director, Investor Relations
Methanex Corporation
604-661-2600 or Toll Free: 1-800-661-8851
www.methanex.com
About Entropy Inc.
Entropy is a privately-owned company applying sophisticated science and engineering to develop commercial CCS projects. Entropy entered a strategic
Forward-Looking Information and Advisory
All references in this press release are to Canadian dollars unless otherwise indicated.
The information in this press release contains certain forward-looking statements, including within the meaning of applicable securities laws. These statements relate to future events or our future intentions or performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “continue”, “demonstrate”, “expect”, “may”, "call for", “can”, “will”, “believe”, “would” and similar expressions and include statements relating to, among other things: the anticipated benefits to be derived from Methanex’s and Entropy’s agreement to invest in a Pre-FEED study for CCUS deployment; the anticipated amount of emissions captured per day; the anticipated amount of investment and portion size of investment contributed by Entropy; the expectation that the investment will create about 200 construction jobs and several permanent jobs; the anticipated amount of additional methanol produced from captured CO2 as feedstock and the expectation that remaining CO2 will be permanently sequestered safely underground; the anticipated expansion into CCU and the potential to reduce carbon emissions while increasing productivity for Entropy’s partners; Methanex’s and Entropy’s actual decisions, activities, results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that Methanex or Entropy will derive from them.
With respect to forward-looking statements contained in this press release, Methanex and Entropy have made assumptions regarding, but not limited to: that Methanex’s and Entropy’s agreement to invest in a Pre-FEED study for CCUS deployment will lead to a completed project, the net reduction of carbon emissions; that the long-term operating costs of Entropy’s CCS projects will not be greater than anticipated; that the government will provide additional clarity on the federal investment tax credit and carbon price certainty; conditions in general economic and financial markets; effects of regulation by governmental agencies; current and future commodity prices and royalty regimes; future exchange rates; future royalty rates; future operating costs; availability of skilled labor; the impact of increasing competition; the anticipated amount of CO2 captured, stored and offset; that Entropy will have sufficient financial resources required to fund their capital and operating expenditures and requirements as needed; that Entropy will have the ability to develop its technology in the manner currently contemplated; current or, where applicable, proposed assumed industry conditions, laws and regulations will continue in effect or as anticipated; and the anticipated benefits and results from Entropy’s technology are accurate in all material respects. Readers are cautioned that the foregoing lists of factors are not exhaustive.
These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Methanex’s and Entropy’s control, including, but not limited to: changes in general economic, market and business conditions; industry conditions; actions by governmental or regulatory authorities including increasing taxes and changes in investment or other regulations; changes in tax laws and incentive programs; changes in carbon tax and credit regimes; competition from other producers; the lack of availability of qualified personnel or management; intellectual property and patent risks; credit risk; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; ability to comply with current and future environmental or other laws; failure to achieve the anticipated benefits and results of Entropy’s technology; failure to achieve the anticipated benefits of Methanex’s and Entropy’s relationships with third parties; and the ability to obtain required approvals of regulatory authorities.
Methanex’s and Entropy’s actual results, performance or achievement in respect of the project could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Methanex or Entropy will derive therefrom. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this news release and Methanex and Entropy disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
The following abbreviations and terms used in this press release have the meanings set forth below:
| CO2 | carbon dioxide |
| tpa | tonnes per annum |
FAQ
What is the target CO2 capture capacity for the Methanex-Entropy CCUS project in Alberta?
How much additional methanol production is expected from the captured CO2 in the Methanex-Entropy project?
What is the estimated investment for the Methanex-Entropy CCUS project in Alberta?
How many jobs is the Methanex-Entropy CCUS project expected to create?
What is Methanex's (MEOH) greenhouse gas emission reduction target by 2030?
