Methanex Provides Update on Trinidad Operations

Rhea-AI Summary

Methanex Corporation (NASDAQ:MEOH) announced that its Titan methanol facility in Trinidad will remain idled indefinitely due to unsuccessful negotiations for a longer-term natural gas agreement. Consequently, the company will restructure its Trinidad operations and reduce its workforce by approximately 60 positions. Despite this, the Atlas facility continues operation, supported by its own gas supply agreement. CEO John Floren reaffirmed Methanex's commitment to Trinidad and hopes to secure a future gas agreement. The company focuses on managing costs while maintaining its global production capacity.

Positive

• Continued operation of the Atlas methanol facility under a separate gas supply agreement.
• Commitment to securing a long-term natural gas agreement to facilitate a future restart of the Titan facility.

Negative

• Indefinite idling of the Titan methanol facility, impacting production capacity.
• Reduction of approximately 60 positions, affecting workforce stability.

VANCOUVER, British Columbia, Jan. 07, 2021 (GLOBE NEWSWIRE) -- Methanex Corporation (TSX:MX) (NASDAQ:MEOH) announced today that it expects its Titan methanol facility (“Titan”) in Trinidad (875,000 annual operating capacity) will remain idled indefinitely. As a result, the Company has made the decision to restructure its Trinidad operations to support a one-plant operation and reduce its Trinidad workforce by approximately 60 positions filled by employees and long-term contractors.

To date, we have not been successful reaching an agreement for an economic longer-term natural gas agreement and given that the economic recovery path remains uncertain we believe it is prudent to reduce costs while continuing our efforts to secure longer-term gas supply. The Atlas methanol facility (Methanex interest 63.1%) is not affected by the change and continues to operate as it is underpinned by a separate natural gas supply agreement that expires in 2024.

John Floren, President and CEO, Methanex Corporation, commented, “We remain committed to doing business in Trinidad and Tobago and we believe that we will be able to secure an economic longer-term natural gas agreement for Titan in the coming years. Our operations in Trinidad are well located to supply global methanol markets and are an important component of our global production network. We are taking the necessary steps to maintain Titan to ensure a safe and efficient restart of the plant when a longer-term gas agreement is reached.”

Methanex is a Vancouver-based, publicly traded company and is the world's largest producer and 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.

FORWARD-LOOKING INFORMATION WARNING

This news release contains forward-looking statements with respect to us and our industry. These statements relate to future events or our future performance. All statements other than statements of historical fact are forward-looking statements. Statements that include the words "believes," "expects," "will," or other comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements.

More particularly and without limitation, any statements regarding the following are forward-looking statements:

• expected new methanol supply or restart of idled capacity and timing for start-up of the same,
• expected shutdowns (either temporary or permanent) or restarts of existing methanol supply (including our own facilities), including, without limitation, the timing and length of planned maintenance outages,
• expected methanol and energy prices,
• expected levels, timing and availability of economically priced natural gas supply to each of our plants,
• anticipated operating rates of our plants,
• expected operating costs, including natural gas feedstock costs and logistics costs, and
• expected actions of governments, governmental agencies, gas suppliers, courts, tribunals or other third parties.
  

We believe that we have a reasonable basis for making such forward-looking statements. The forward-looking statements in this document are based on our experience, our perception of trends, current conditions and expected future developments as well as other factors. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements, including, without limitation, future expectations and assumptions concerning the following:

• the supply of, demand for and price of methanol, methanol derivatives, natural gas, coal, oil and oil derivatives,
• our ability to procure natural gas feedstock on commercially acceptable terms,
• operating costs, including natural gas feedstock and logistics costs, capital costs, tax rates, cash flows, foreign exchange rates and interest rates, and
• global and regional economic activity (including industrial production levels).

However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties primarily include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, including, without limitation:

• conditions in the methanol and other industries including fluctuations in the supply, demand and price for methanol and its derivatives, including demand for methanol for energy uses,
• the price of natural gas, coal, oil and oil derivatives,
• our ability to obtain natural gas feedstock on commercially acceptable terms to underpin current operations and future production growth opportunities,
• the ability to carry out corporate initiatives and strategies,
• actions of competitors, suppliers and financial institutions,
• actions of governments and governmental authorities, including, without limitation, implementation of policies or other measures that could impact the supply of or demand for methanol or its derivatives,
• world-wide economic conditions,
• the impacts of the COVID-19 pandemic, and
• other risks described in our 2019 Annual Management’s Discussion and Analysis and our Third Quarter 2020 Management’s Discussion and Analysis.
  

Having in mind these and other factors, investors and other readers are cautioned not to place undue reliance on forward-looking statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes implied by forward-looking statements may not occur and we do not undertake to update forward-looking statements except as required by applicable securities laws.

For further information, contact:

Kim Campbell
Director, Investor Relations
Methanex Corporation
604 661 2600 or Toll Free: 1 800 661 8851
www.methanex.com

FAQ

Why is Methanex not operating the Titan facility?

Methanex is unable to secure a long-term natural gas supply agreement, leading to the indefinite idling of the Titan facility.

What impact does the Titan facility idling have on Methanex (MEOH)?

The idling of the Titan facility reduces Methanex's overall production capacity, which could affect revenue.

What steps is Methanex taking regarding its Trinidad operations?

Methanex is restructuring its Trinidad operations to support a single plant operation and reducing its workforce by about 60 positions.

Is the Atlas facility impacted by the Titan facility's idling?

No, the Atlas facility continues to operate as it is supported by a separate natural gas supply agreement.

What is Methanex's plan for the future of the Titan facility?

Methanex aims to secure a longer-term natural gas agreement to enable a safe and efficient restart of the Titan plant.