What is Methanol?

Project Passport

  Project developer: TOO "Zhaik Petroleum" 

  Co-developer: Westgasoil Pte.  Ltd.  (Singapore)  

 Locations: West Kazakhstan region, Baiterek district, Beles 

Financing structure: 30% private investment: HALDOR TOPSOE (Denmark), Sanli Technologies (China), SAS (Germany) 

  70% government funds: Development Bank of Kazakhstan and Export Credit Agencies.  

 Years of implementation: 2018 - 2022 - Investment period;  2022-2042 - Operational period

 Estimated tax revenues to the budget of the West Kazakhstan region: 66 billion tenge for the period of operation from 2022-2042

 Number of jobs: 500 people for the operation period, 900 people for the construction period.  

 Member of the state.  programs: Construction of the access road of Zhaik Petroleum Ltd LLP at Rostoshsky stations is carried out within the framework of the Business Road Map 2020 program message

Description of the main products and their advantages

   Methanol  

 The simplest monohydric alcohol combines the properties of a very weak base and an even weaker acid. 

   Reacts with alkali metals with the evolution of hydrogen, forming methylates.  (eg CH³ONa) in reaction with acids, esters are formed.  There are several known methods for producing methanol: Dry distillation, wood and lignin, thermal decomposition of formic acid salts, synthesis from methane through methyl chloride followed by saponification, incomplete oxidation of methane and production from synthesis gas.   

Methanol is transported in special rail tank cars, tank cars, steel drums with a capacity of 200 m³, plastic containers or metal barrels with an outer box made of wooden boards and glass 20 liter bottles in accordance with the rules for the carriage of goods.   

The product is stored in sealed containers, in shaded, ventilated warehouses, away from heat sources, sparks, direct sunlight, separately from oxidizers. 

  Density

   0.8100 g / cm  

 Chemical formula  

 CH³OH  

 Application  

 The main applications of methanol: 

 * Production of formaldehyde (involved in the synthesis of various plastics) and tert-butyl methyl ether (high-octane additive to motor fuel);

  * production of synthetic rubbers, acetic acid, methyl methacrylate, plastics, solvents, methylamines, dimethyl terephthalate, methyl formate, methyl chloride; 

 * industrial solvent;  

* additive to motor gasoline   

Transportation of raw materials

   The main type of natural gas transportation is pipeline. 

 The main type of nitrogen transportation is in cylinders  

Colour   

Has no color

Technological process

methanol production will be carried out using Haldor Topsoe GTM (Gas To Methanol) technology.
1. Desulfurization
2. Gas processing (into hydrogen, carbon monoxide and carbon dioxide)
3. Synthesis
4. Purification of the final product from impurities

Key words
- Steam
- Natural Gas
- hydrogenation
- sulfur removal
- preliminary processing
- Superheated steam release
- Make-up gas compressor
- Circulating compressor
- Methanol synthesis
- Purified gas
- Crude methanol

The main buyers of methanol in the Republic of Kazakhstan

JSC "national welfare Fund" "Samruk Kazyna" unites all national companies into a single holding, manages portfolio companies - to increase their long-term value and sustainable development, as well as through investments in the development of priority sectors of the national economy. The Fund also conducts e-purchases for companies, through which you can track the demand for certain products:

* The largest buyer of methanol in 2018 was Atyrau oil refinery LLP, which ordered 92% (12.5 thousand tons) of the total volume of methanol, worth about 1.16 billion tenge

* JSC " INTERGAS Central Asia "and" Amangeldy GAZ " LLP on average purchase 503 tons of methanol per year for the amount of about 85 million tenge.

Potential competitors

of Methanol is not less than 20 thousand tons

The main consumer of methanol is the gas industry

Aksai City

- Karachaganak Petroleum Operating B. In

atyrau city

- TOO Tengizchevroil

- - NCPAP

city of Aktobe

- CNPC - Aktobemunaygas

The City Of Zhanaozen

- "Ozenmunaigas

city of Aktau

- "Mangistaumunaygas»

- Karazhanbasmunai

City Of Kyzylorda

- "PetroKazakhstan"

City Of Nursultan

- JSC NC "KazMunayGas"

- JSC "KMG EP»

Almaty city

- KazRosGaz

Import of anti-knock compounds, resin oxidation inhibitors, thickeners and additives in the Republic of Kazakhstan

The graph is shown below...

Green lines shows the Volume of imports

Blue line - the Value of imports

Thousand us dollars

The Republic of Kazakhstan annually imports $ 29 million worth of anti-knock compounds, resin oxidation inhibitors, thickeners and additives for the oil and gas industry.

The main importers are the United Kingdom (2 thousand tons or 8.6 million US dollars for 2018) and China (2 thousand tons or 3.5 million US dollars for 2018)

Local production of methanol and its subsequent processing into drilling fluids for the oil and gas industry will reduce the volume of imports of the above products

use of methanol

Methanol is used as a part of coagulants, inhibitors or drilling fluids in the oil and gas industry, due to its low freezing point and good solubility. In organic synthesis, methanol is used to isolate formaldehyde, formalin, acetic acid and a number of esters (for example, MTBE and DMT), isoprene.

Formaldehyde is mainly produced from methanol, which is used for the production of urea-formaldehyde and phenol-formaldehyde resins. Methanol is also used in the paint industry for the manufacture of solvents in the production of lacquers, and as an additive to liquid fuel for internal combustion engines.

Global demand for methanol by product type in 2018

Olefins/Propylene - 14%

tert-Butylmethyl ether - 14%

gasoline mixing - 14%

Dimethyl - 14%

Acetic acid - 13%

Other / DMT - 8%

Solvents - 7%

Biodiesel - 6%

Methylamines - 4%

Chloromethanes - 3%

Import volumes and main exporters of methanol in Kazakhstan

Trade deficit of methanol

volumes of methanol imported to Kazakhstan are sensitive to its price. The drop in spot prices for methanol in 2017 was accompanied by a significant increase in the volume of imported product.

According to International Trade Centre calculations, the Russian Federation is the main importer of methanol to Kazakhstan (31 thousand tons worth 13.5 million US dollars in 2018).

Azerbaijan imported 998 tons of methanol to the country, and Uzbekistan - 665 tons

. the volume of methanol imports and the average price per ton of imports

GreenLine - the Volume of import

Blue line - Average cost per ton

The annual value of imports of methanol

The grid is shown below the text - Thousand. Dollars'

Kazakhstan's main methanol exporters for 2018

European countries - 0.22%

Uzbekistan - 39.90%

Azerbaijan - 59.88%

Markets for methanol

Western Europe

• demand: 6879 thousand tons

• Import: 4907 thousand tons

• Export: 313 thousand tons

• Net imports: 4594 thousand tons

• Most of the imports came from the United States, Trinidad and Tobago, Russia, and Saudi Arabia.

Russia

• Demand: 2033 thousand tons

• No import

• Export: 1225 thousand tons

• Major producer and exporter of methanol

• Most of the product is sold to Western and Central Europe

Kazakhstan

• Demand: 40 – 100 thousand tons

• Import: 40 -100 thousand tons

• No export

• Net imports: 40 - 100 thousand tons

• Small user of methanol.

• Most of the demand is provided by imports from Russia

Central Europe

• Demand: 1014 thousand tons

• Import: 1077 thousand tons

• Export: 155 thousand tons

• Net imports: 922 thousand tons

• Demand is relatively low

• The region's needs are met

mainly by imports from Western Europe and Russia.

Turkey

• Demand: 472 thousand tons

• Import: 472 thousand tons

• No export

• Net imports: 472 thousand tons

• No own production

China

• Demand: 38,026 thousand tons

• Import: 5235 thousand tons

• Export: 102 thousand tons

• Net imports: 5133 thousand tons

• The largest manufacturer and

importer of methanol in the world.

• Most of the imports came from

USA, Trinidad and Tobago, Iran,

Oman, Saudi Arabia and

new Zealand.

Pricing mechanism and pricing of methanol

pricing mechanism

Western Europe

Export price from Central Europe to Western Europe China price + shipping cost + duties + processing

Marginal production costs can lead to higher prices.

China

Block associated with too low production costs; Global price setter

North America

Methanol prices from Europe to North America - China price + shipping cost + duties

Central Europe

Global price recipient

Balances the volume of exports to regions for high netbook (NB) Netbook to China: prices in China are lower than the cost of transportation from Europe to China.

It is more profitable to deliver to Western Europe and North America

South America

When supplying methanol to North America, South American producers set a price that will prevent imports from Europe

Historical prices for methanol

Light green line - US methanol MMSA Contract Index, us dollars/ meter. ton

Dark green line - methanol Asia MMSA contract Transaction Reference, us $ / meter. ton

Light Blue line - Methanol Europe MMSA Contract, up to us $ / meter. ton

Based on the figure above, methanol prices have been quite volatile in recent years. So, according to the results of the second quarter of 2019, the contract price for methanol averaged 376 US dollars per ton, which is 22.5% lower than in 2014.

The highest jump in contract prices for methanol was observed in 2018 in the EU. Compared to 2016, when the contract price was held at us $ 278/ metric ton, in 2018 prices increased by 83%, reaching us $ 474. In 2019, prices stabilized, falling to the level of 400 us dollars/ meter. ton.

High volatility was observed in the us methanol market. In 2018, contract prices increased by 77%, reaching us $ 492 - the absolute maximum of contract prices for methanol for that year. In the us and European markets, prices increased by more than half from 2016 to 2019, while in the Chinese market, prices have only increased by 17% over the past 4 years. During the price spike in 2018, prices rose to $ 391.

Spot prices for methanol

Spot prices for methanol as of June 1, 2019

Europe

Methanol: us $ 288 per tonne

US

Methanol: us $ 231 per tonne

PRC

Methanol

Imports: us $ 279 per ton

Domestic market: us $ 341 per ton

Southeast Asia

Methanol - us $ 323 per ton

Chapter 13

The largest exporters of methanol

The largest exporters of methanol

Netherlands

Export in 2018 - 2 million tons

Importers: Germany Belgium United Kingdom

Russia

Exports in 2018 - 1.8 million tons Importers: Finland Poland Slovakia

USA

Exports in 2018 - 1.9 million tons Importers: South Korea Netherlands Taiwan

Malaysia

Export in 2018 - 1.6 million tons

Importers: China, Indonesia, Singapore, Thailand

, Iran

Exports in 2018 - 4 million tons Importers: China India Egypt

total in 2018 exported 16.3 million tons of methanol

The largest exporters of methanol  

Netherlands 

Export in 2018 - 2 million tons 

Importers: Germany Belgium United Kingdom 

Russia 

Exports in 2018 - 1.8 million tons Importers: Finland Poland Slovakia 

USA 

Exports in 2018 - 1.9 million tons Importers: South Korea Netherlands Taiwan

Malaysia 

Export in 2018 - 1.6 million tons 

Importers: China, Indonesia, Singapore, Thailand

, Iran 

Exports in 2018 - 4 million tons Importers: China India Egypt

total in 2018 exported 16.3 million tons of methanol

The largest importers of methanol

are the Netherlands 

Imports in 2018 - 2.4 million tons Exporters: Equatorial Guinea Trinidad and Tobago Venezuela Oman Russian Federation 

USA 

Imports in 2018 - 2.5 million tons Exporters: Trinidad and Tobago Venezuela Equatorial Guinea Canada Vietnam 

PRC

Imports in 2018 - 7.4 million tons Exporters : Iran, New Zealand, Saudi Arabia, Oman, Trinidad and Tobago

Thailand 

Import in 2018 - 2 million tons 

Exporters: Saudi Arabia, Malaysia, Qatar, Brunei, Indonesia

In total, 33.1 million tons of methanol were imported in 2018

Global methanol production by region

Increasing demand for methanol and its products is the main driver of market growth. Global methanol production is estimated at 139.9 million tons in 2019. 

The main production capacity of methanol is concentrated in the Asia-Pacific region. 

The average growth rate of production for the period 2000-2018 was about 11%. 

The combined average annual growth rate by 2023 will be 7.5%

Global methanol production by region 

Europe - 1%

1.8 million tons

North America - 7%

10 million tons 

The Asia - Pacific region - 67%

93.4 million tons

Russia and CIS countries - 4%

5.6 million tons

Central and South America - 1%

0.8 million tons

middle East - 20%

28.4 million tons

The largest consumers of methanol in the World

global production and consumption of methanol 

Over the past 5 years, there has been a positive trend in demand in the market of gas chemistry products. 

Thus, the production of methanol over the past 5 years has grown by 38.3% with an average annual growth rate of 6.7%. In absolute terms, methanol production increased from 69.2 million tons per year in 2014 to 95.6 million tons per year in 2018. 

Global methanol consumption has also shown an upward trend over the past five years. All produced methanol is almost completely consumed. 

A rapidly growing segment of end-users today are manufacturers that use the methanol-to-olefins (MTO) process in their production. Ethylene and propylene are in great demand for plastic production. MTO manufacturers are mainly located in China and usually use the process of steam cracking of ethane and naphtha in production. In the first half of 2019, the EU propylene market experienced a shortage due to interruptions in the operation of the main German

processing plants due to contaminated raw materials supplied by Russian oil companies. The lack of cheap raw materials and large MTO producers that can meet demand in the EU, due to favorable price dynamics, makes the EU market attractive for suppliers with more relaxed local conditions. 

Overall, China was the largest consumer of methanol in 2018, with a volume of 7.4 million tons. The top three countries in terms of methanol consumption are the United States with 2.5 million tons and the Netherlands with 2.4 million tons.

The world's largest methanol consumers (2018) 

Million tons 8, 6, 4, 2, 0

China - 7.4 

US - 2.5

The Netherlands - 2.4 GHz

Thailand - 2.0

India - 1.9 

South Korea - 1.9 

Japan - 1.9

Germany - 1.5

Chinese Taipei - 1.4 

Brazil - 1.2

————————————

Light Green - methanol consumption, thousand tons

Dark Green - methanol production, thousand tons

Market prerequisites for project implementation

Growing demand for methanol

According to a report by Market Research Future ® (WantStats Research And Media Pvt. Ltd.), the global methanol market is expected to reach us $ 61 billion by 2023. Methanol is widely used as an alternative fuel in internal combustion engines due to its efficiency and cost-effectiveness. In addition, formaldehydes produced from methanol are used in paints, plastics, explosives and plywood due to their exceptional mixing properties and high-octane performance. Growing demand for paints, adhesives, electronics, and medicine is also driving the growth of the methanol market.

Import substitution

Despite the presence of a rich raw material base, the lack of basic chemical production is a deterrent to the production of chemical products of further processing with high added value, the development of petrochemistry, pharmaceuticals, Agrochemistry and soil Sciences, the development of competencies and qualified domestic personnel in these industries.

Availability of a ready-made customer base

Kazakhstan is 100% import-dependent on methanol, the annual consumption of which is at least 25 thousand tons. Imported methanol is used by the gas industry as a method of controlling the formation of hydrates. The need to import methanol (raw materials) at high prices causes the price non-competitiveness of Kazakhstan's final products and enterprises.

Availability of a rich raw material base

The low production cost of products can be achieved due to its own cheap raw material base (in the cost structure, the cost of raw materials and materials occupies 72%). Kazakhstan has significant natural gas reserves (over 1.3 trillion m3), two - thirds of which are associated gas that lies in the same productive horizons as oil. In connection with the growth of oil production, the question of how to effectively utilize the development of petrochemicals in accordance with the requirements of environmental standards is relevant.

Export potential

The products will also be sold for export. The external market is attractive for sales due to growing demand and the availability of cheap raw materials. The international methanol market is a growing global industry, thanks to the rapid development of petrochemicals and stricter environmental standards.

Effects and benefits of the project

Receipts in the budget.

Increase in cash receipts to budgets of various levels from Project activities

Development of export potential

increasing exports of products as the domestic market becomes saturated

efficient use of the country's resources

Efficient use of hydrocarbon raw materials and promotion of the development of the manufacturing industry in the framework of state tasks to accelerate the diversification of the economy

development of the gas and chemical industry in the West Kazakhstan region

Support for domestic producers attracting domestic and foreign investment in the West Kazakhstan region contributes to the further development of the gas chemical cluster In the region

support for domestic producers

the possibility of developing small and medium-sized businesses in the West Kazakhstan region by attracting them to provide services. Providing the region with a raw material Base for the development of production and supply of finished products to domestic and foreign markets

reducing unemployment in the region

Creating jobs during construction and operation