Billion-dollar
loan for methanol firm
Trinidad
Express
Port
Spain
Petroleumworld.com
07 23 06
Methanol Holdings Trinidad Ltd. has signed a US$1.2
billion loan agreement with the German-based KfW
IPEX-Bank to build a petrochemical plant in Trinidad,
the largest ever private sector financing project
in the Caribbean.
Construction
on the seven-building complex will begin later this
year at the Point Lisas industrial complex, said
Vishard Chandool, spokesman for the umbrella organisation
of four Trinidadian methanol plants.
The
project is scheduled to be completed by the first
quarter of 2009.
The
plant will produce two chemicals: urea ammonium
nitrate, or UAN, a chemical used to fertilise crops
and flowers; and melamine, a powder from which furniture
laminate and a range of resins are produced.
The
construction project was expected to employ some
2,500 workers. Once completed, the petrochemical
plant will employ 400 permanent workers, Chandool
said.
The
loan agreement was signed last week Wednesday by
representatives from Methanol Holdings and KfW IPEX-Bank.
The
following is an edited version of acting Energy
Minister Christine Sahadeo's speech at the signing
ceremony:
In
the early 1990s the Government adopted a privatisation
programme centred on the need for enhancing market
efficiency and promoting competitiveness on an economy-wide
basis. In the ultimate, the generation of sustained
expansion and economic growth has been the overriding
objective. The privatisation of the Trinidad and
Tobago Methanol Company Limited [TTMC] is an excellent
example of the benefits which can accrue to the
national economy. This privatisation gave rise to
the formation of this formidable company - Methanol
Holdings Company
Limited.
It
was in 1993 some 13 years ago when the petrochemical
sector was still in an embryonic stage that the
Government decided to introduce the foreign private
sector into its major petrochemical company. Ferrostaal
AG and Helm AG two [2] German Companies purchased
31.0 per cent of the shareholdings in an expanded
TTMC for the sum of US$47.0 million
This
new equity, together with a loan of US$188.0 million
was used for the construction of a new methanol
facility at a cost of approximately US$235.0 million.
Subsequently in 1997 a consortium comprising Ferrostaal
AG, Helm AG and CL Financial Limited purchased the
69.0 per cent residual shareholding from Government.
The expanded TTMC two methanol plants was merged
with Caribbean Methanol Company Limited [CMC] into
a single liability company which gave rise to other
methanol and ammonia companies under the umbrella
of Methanol Holdings Company Limited.
MHTL
was formed in 1999, when Trinidad and Tobago Methanol
Company [TTMC], Caribbean Methanol Company [CMC]
and the Methanol IV Company [MIV] all became subsidiaries
of MHTL. In 2004 the amalgamation of all of these
companies was completed and operation under one
single entity, MHTL began.
A
few months ago I had the pleasure of attending the
commencement of construction for the AUM Complex,
the first major downstream project in Trinidad and
Tobago. Today, I again have the pleasure to be here
to witness the historic loan signing between Methanol
Holdings [Trinidad] Limited [MHTL] and KfW for this
project. I must congratulate MHTL on this milestone
as this loan in the sum of US$1.2 billion represents
both KfW's largest loan to any single entity as
well as MHTL's largest financial commitment to date.
As
a local indigenous company, MHTL has propelled itself
to become one of the most successful and globally
competitive companies in the methanol industry.
It's commissioning of the world's largest methanol
plant in 2005, the M5000 mega methanol plant also
enabled the company to achieve the status of the
largest exporter to the North American market and
accounted for Trinidad becoming the Number One exporter
of methanol in the world with combined exports of
over six million metric tonnes.
MHTL's
relationship with KfW stems back to 1991, when KfW
loaned US$136 million to MHTL's former subsidiary
company, CMC, then the first private sector company
in the local petrochemical sector for the construction
of its methanol plant. This loan was only the start
of what has turned out to be a fruitful relationship
between these two
organisations.
Over
the next ten years, KfW was responsible for loans
of US$188 million, US$165 million and US$438.5 million
respectively for the construction of Trinidad and
Tobago Methanol Company's second methanol plant,
the Methanol IV Company and most recently, MHTL's
M5000 methanol plant. KfW also continued to support
projects undertaken by MHTL's shareholders and provided
financing for the shareholders two ammonia plants,
N2000 and CNC. These loans represent a combined
total investment of approximately US$3 billion byKfW
in the methanol and ammonia industry in Trinidad
and Tobago and to this particular shareholders group
over the last 15 years.
Over
the years MHTL and its shareholders have shown their
deep commitment to the development of the economy
and people of Trinidad and Tobago by their continuous
investment of dividends into new projects with their
most recent investment being the M5000 plant. The
AUM complex therefore is another shining example
of this continued commitment. This complex will
provide a significant contribution to the country's
GDP and would provide employment for approximately
2000 persons during construction and an estimated
400 permanent and 600 contractual persons after
its construction. MHTL has also been a great advocator
of local content and at present all of the company's
employees are Trinidadians. It is expected that
with the advent of the AUM complex, this trend will
be maintained.
This
project signals a bold departure in the direction
MHTL has taken to date but it promises endless possibilities.
This project, the first of its kind in Trinidad
and Tobago will push the natural gas frontier downstream
of primary petrochemicals which will manufacture
new products that open the door to a range of consumer
goods. One of these final products, melamine, offers
a wealth of opportunities for further expansion.
Melanie is used to produce melamine formaldehyde,
a petrochemical which is used to make wooden laminated
products such as furniture and flooring and household
products such as tableware. Melamine thus presents
lucrative new business opportunities for persons
and companies interested in getting involved in
the furniture and surface coating industry of Trinidad
and Tobago.
The
confidence of investors has also been demonstrated
by the fact that the National Gas Company, a wholly-owned
state enterprise was able to raise US$400 million
on the local market in February 2006. It was quite
significant to note that the bond issue was unsecured.
Trinidad Express
Wednesday, July 19th 2006
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©2006 Trinidad Express . All Rights Reserved.
