OIL & GAS
G: According to reports, the petrochemical industry will maintain high growth rates until 2030, companies announce methanol projects on an ongoing basis, but most of the projects announced are in Asia and the Middle East. How do you think it will affect the global market?
TC: Asia remains as one of the regions in the world where a number of developing countries are facing high rates of economic growth, rapid growth of the middle-income strata with favorable population demographics.
The confluence of such factors provides for the potential of increasing rates of consumption, resulting in a promising future of growth for methanol as feedstock for many downstream petrochemical products.
China remains the largest methanol market for production and consumption in the world, and it has diversified its application of methanol from a conventional petrochemical product to utilization in energy-related applications such as fuel for land transport, cookstoves, industrial boilers, and more. India which is the second largest country in the region has also recently embarked on its methanol economy project, where methanol will be used more as a fuel for land transport, cookstoves, and other applications.
This is expected to increase the consumption of methanol within the country over the coming years. The potential for greater methanol demand in the region has not gone unnoticed with more projects being announced in Asia and the Middle East so that production can be located closer to markets that have the potential of increasing offtake.
G: How competitive the Russian methanol market compare to other countries?
TC: Russian methanol will continue to be competitive as long as there is access to affordable natural gas as well as continued streamlining of logistics and transport to allow for the transport of products to market at a lower cost.
The announcement of the construction of the Nakhodka methanol plant near Vladivostok will undeniably allow Russian methanol to circumvent logistic costs of transport methanol through inland routes while having closer proximity to Asian markets such as China.
Such projects that have access to affordable feedstock and proximity to demand markets will improve the competitiveness of Russian methanol.
G: In your opinion, how vital energy-related methanol applications?
TC: Energy-related methanol applications constitute approximately 45% of global demand for methanol, and these figures will grow in the near future.
The reason for this is methanol’s clean-burning properties which make it a viable alternative fuel in an array of energy-related applications as pressure mounts to reduce the impact of economic activity on the environment, improve air quality, and decarbonize.
The possibility of producing methanol from a wide range of renewable feedstocks (e.g. captured CO2, municipal solid waste, etc.) allows it to be a low-carbon or carbon-neutral fuel which makes it a viable solution in the search for ways to lower greenhouse gas emissions. On a more practical front, countries are interested in how methanol can help reduce their reliance on imported energy products if there is potential for domestic methanol production.
Energy-related methanol applications can potentially see greater growth rates than conventional demand from the petrochemical industry. The ability for energy-related methanol applications to address some of the immediate environmental challenges and its consequent potential for high growth rates underscores its importance to the industry.