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Update: Valero Energy axes planned US methanol plant
HOUSTON, March 2, 2016 (PCW) -– Valero Energy has axed its planned methanol plant at its St. Charles refinery, the company said Wednesday.
The San Antonio-based company’s $700 million project had a planned capacity of 1.6 million mt/yr (3.5 billion lb/yr) and was expected to have come online sometime this year.
Even though feedstock prices of natural gas is at multi-year lows, US methanol prices are also falling, effectively contracting profit margins.
Lower net earnings of late have affected the company’s capital expenditure strategy. During its 4Q earnings call in late January, Valero announced it would build a 13,000 b/d alkylation unit at its Houston refinery, but did not make mention of the methanol project, which it first announced in 2013. During that time, Valero also reported 4Q net earnings of $862 million, down about 9.5% from the year-ago period. – Samantha Hartke