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Methanex operates two plants at its site on La. 73 near River Road in Geismar. The company said in June it will build a third methanol plant in Ascension Parish, an investment of $1.4 billion, but is now evaluating its expenses and the project.

Canadian methanol manufacturer Methanex Corp. plans to restart construction on a plant in Ascension Parish after hitting the pause button more than a year ago. 

Methanex had decided to defer $500 million in spending for its third methanol plant in Geismar for 18 months starting in early April 2020, citing an uncertain global economy at the start of the coronavirus pandemic. 

The previously planned $1.4 billion methanol plant, which is expected to produce 1.8 million tons of methanol, had reached a final investment decision before the pandemic and its related economic lockdown began.

The Louisiana plant is the company's only major project in the works for the next few years. The size of the plant was reduced by $200 million to $600 million, making overall costs for the project between $1.25 billion up to $1.35 billion.

"This revised estimate is based on a significant reduction in the project's execution risk profile," according to the company.

The Vancouver-based company expects to begin manufacturing methanol from the plant by the end of 2023 or early 2024, which is later than previously planned in 2022. 

The plant is expected to create 62 permanent jobs for a total of 230 jobs across all three plants in Geismar.

The business looks to spend $435 million through third quarter this year and another $900 million in expenses after October. Methanex will fund the construction with cash on hand and from future cash flow instead of taking on more debt.

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The two other Louisiana facilities were dismantled in Chile and relocated to the U.S. several years ago.

The average price of methanol has been around $430 per ton the past few months, which is closer to pricing during 2018. During 2019 and 2020, average prices for methanol dropped to lows closer to $200 per ton, according to the Methanol Institute, a trade organization for the industry.

The company estimates that demand for methanol will increase by 20%, or 16 million tons, in the next five years while there is 14 million tons of capacity in the market from existing methanol plants.

"The timing is right to restart construction on our Geismar 3 project as the methanol industry outlook is positive, we have a strong financial position to fund the project and the project has been significantly de-risked and is well positioned to be completed on-time and on budget," John Floren, CEO of Methanex, said in a news release.

The Geismar plant was described as the least expensive of its portfolio and would have "one of the lowest CO2 emissions intensity profiles in the industry." The concept of reducing carbon dioxide intensity rather than pure volume of emissions is common among industrial complexes, especially as companies often increase capacity year after year to meet customer demand.

Email Kristen Mosbrucker at kmosbrucker@theadvocate.com or follow her on Twitter @k_mosbrucker