Low natural gas prices are bringing in petrochemical plants from overseas, and domestic energy infrastructure companies are greeting them at the dock with open arms.
Pipeline-and-energy storage king Kinder Morgan announced on Monday plans a new long-term contract with Methanex Corporation to store the company’s methanol at its Geismar, La terminal.
Kinder Morgan will spend $58 million to build the new storage facilities in a deal that will allow Canadian-based Methanex to move its production facilities from its current Chile location to Louisiana.
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“The abundance of attractively priced domestic natural gas has led to a resurgence in the chemical and manufacturing industries,” said John Schlosser, president of Kinder Morgan Terminals, in a written statement. “We are very pleased to be able to leverage our existing footprint in Geismar in support of Methanex’s significant capital project.”
Methanex recently signed a 10-year deal with Chesapeake Energy Corp. for natural gas, which it will use as a feedstock for the plant.
The Methanex plant produces one million tons of methanol a year, and is expected to begin production in the second half of 2014. Methanol is a petrochemical, made from carbon monoxide, carbon dioxide, and hydrogen and is used in everything from windshield washer fluid to recyclable plastic bottles to to synthetic fibers. It is a key ingredient in direct gasoline blending, dimethyl ether and biodiesel.
Kinder Morgan has 24 terminals in Louisiana. These terminals handle a range of services, including vegetable oils and chemicals, petrochemical products and dry bulk storage. The terminals also service as a ship-to-barge transfer point for crane equipment on the Mississippi River.
Kinder Morgan Energy Partners, one of the largest pipeline transportation and energy storage companies in North America, owns an interest in or operates approximately 44,000 miles of pipelines and 180 terminals.