Methanex Corporation Provides Update on Trinidad and Tobago Operations

Rhea-AI Summary

Methanex signs natural gas agreement with NGC to restart Titan plant and idle Atlas plant in Trinidad and Tobago.

Positive

• Methanex signs two-year natural gas agreement with NGC to restart Titan methanol plant in September 2024.
• Restarting Titan plant based on economic considerations and lower capital requirements compared to Atlas plant.
• Gas price and lower production volume in Trinidad will reduce annual adjusted EBITDA and free cash flow capability by approximately $80 million and $40 million respectively, starting in 2025.

Negative

• None.

VANCOUVER, British Columbia, Oct. 13, 2023 (GLOBE NEWSWIRE) -- Methanex Corporation (TSX:MX) (NASDAQ:MEOH) announced today that it has signed a two-year natural gas agreement with the National Gas Company of Trinidad and Tobago (NGC) for its currently idled, wholly owned, Titan methanol plant (“Titan”) (875,000 tonnes per year capacity) to restart operations in September 2024. Simultaneously, the Company announced its intention to idle the Atlas methanol plant (“Atlas”) (Methanex interest 63.1% or 1,085,000 tonnes per year capacity) in September 2024, when its legacy 20-year natural gas agreement expires.

Rich Sumner, President and CEO, Methanex Corporation, stated “I am proud of our team’s effort to reach an agreement with the NGC that allows us to preserve this strategic location in our global portfolio and maintain a world-class team. The two-year term of the Titan contract offered by the NGC reflects the challenging near-term gas supply and demand situation in the country. In the medium to long term, the NGC continues to work with the upstream sector on their plans to develop increased gas supply to the country through various projects, although uncertainty remains.  

We have been working with the NGC and the Government of the Republic of Trinidad and Tobago for an extended period to secure economic gas supply for the Atlas and Titan plants. Our decision to restart Titan and cease operations at Atlas was based on economic considerations, including significantly lower capital requirements at Titan compared to Atlas. The new gas price and lower production volume in Trinidad will reduce annual adjusted EBITDA and free cash flow capability, starting in 2025 and compared to 2023, by approximately $80 million and $40 million, respectively, across a range of methanol prices.

We would like to thank the NGC for their professionalism during the negotiation process and reaffirm our commitment to working with the NGC and the Government of the Republic of Trinidad and Tobago to secure economic long-term gas supply.”

Methanex is a Vancouver-based, publicly traded company and is the world’s largest supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol “MX” and on the NASDAQ Global Market in the United States under the trading symbol “MEOH”. Methanex can be visited online at www.methanex.com.

Inquiries:
Sarah Herriott
Director, Investor Relations
Methanex Corporation
604-661-2600 or Toll Free: 1-800-661-8851
www.methanex.com

FAQ

What is the agreement between Methanex and NGC?

Methanex has signed a two-year natural gas agreement with the National Gas Company of Trinidad and Tobago (NGC) to restart its Titan methanol plant.

When will the Titan plant restart operations?

The Titan plant is scheduled to restart operations in September 2024.

Why is Methanex idling the Atlas plant?

Methanex is idling the Atlas plant in September 2024 when its legacy natural gas agreement expires.

How will the gas price and production volume in Trinidad affect Methanex's financials?

The new gas price and lower production volume in Trinidad will reduce Methanex's annual adjusted EBITDA and free cash flow capability by approximately $80 million and $40 million respectively, starting in 2025.