Market and product

Celanese will delay construction of the new acetic acid plant and the expansion of its methanol production at its Clear Lake site in Texas by 18 months, the US-based acetyls producer said on Monday.

“First, the construction of a new acetic acid production unit at Clear Lake, as part of our global acetic acid reconfiguration, will be deferred by approximately 18 months, and is now expected to be complete by the middle of 2023,” CEO Lori Ryerkerk said in a statement.

She added that the engineering on this project is completed and the next steps will continue, but at a reduced pace.

“In light of current dynamics, we have heavily prioritised productivity-based projects with near-term benefits, resulting in a reduction in 2020 capex from previous guidance of $500m to less than $350m,” Ryerkerk said.

The project will add 800,000 tonnes of acetic acid capacity, boosting its production in Clear Lake by 54%, while the company cuts back in Asia. Celanese previously said it will reduce its capacity in Asia by 600,000 tonnes, largely at plants in China and Singapore.

FAIRWAY METHANOL EXPANSION DELAYED

The company also announced a delay of the expansion of methanol production in Clear Lake.

“[T]he associated incremental expansion of our [joint venture] methanol production unit at Clear Lake will also be deferred by approximately 18 months,” said Ryerkerk.

The joint venture operates as Fairway Methanol LLC, with both Celanese and Mitsui maintaining a 50/50 ownership.

The unit was commissioned in October 2015 with an annual capacity of 1.3m tonnes. The expansion is expected to increase production to 1.7m tonnes/year.

In July, Celanese said it received the state permits required to move forward with expanding methanol capacity. Financial details and production timing were not disclosed.

Most recently, the first turnaround of the Fairway unit was completed in Q1 at the cost of $15m to Celanese. The maintenance is expected to take place every four years, the company said.

Both the US methanol and acetic acid markets have been subdued in recent weeks as demand is low and buying interest thin amid the bearish economic outlook.

Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. Smaller amounts go into production of dimethyl terephthalate (DMT), methyl methacrylate (MMA), chloromethanes, methylamines, glycol methyl ethers, and fuels applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.

Major US Methanol producers include Methanex, OCI, Celanese and LyondellBasell.

Acetic acid is largely used to manufacture VAM, used in the production of water-based paints, adhesives, paper coatings, films, textile finishes and chewing gum.