Due to the significant uncertainty in the global economy from the COVID-19 pandemic, Methanex Corporation has decided to defer approximately $500 million of previously announced capital spending on its Geismar 3 methanol project for up to 18 months. An update also provided on other actions Methanex is taking to support its financial position.
Previously, the company disclosed the decision to idle for an indefinite period its Chile IV plant effective April 1, 2020 and Titan plant in Trinidad effective March 16, 2020. Approximately 19 percent of Methanex’s annual operating capacity represented by those two plants.
For up to 18 months, Methanex is placing its Geismar 3 project on temporary “care and maintenance”. During a deferral of up to 18 months, the expected capital spending is the same as the expected capital spending that would have been incurred if the Geismar 3 project was cancelled outright. When market conditions improve, this action will enable Methanex to complete this highly advantaged project.
From January to March 2020, the company expects to spend approximately $100 million on the project. A further $200 million will be spent on the project from April 1, 2020 to September 30, 2021. Until market conditions allow the Geismar 3 project to restart, Methanex will suspend the construction activity and procurement of non-critical equipment and bulk materials.
