EMethanex prepares shortlist, targets new shareholders for methanol plant

03 March 2006

At least three contractors are seeking prequalification for the engineering, procurement and construction (EPC) contract to build a greenfield methanol plant in Damietta port for Egyptian Methanex Methanol Company (EMethanex). The joint venture partners in EMethanex - state-owned Egyptian Petrochemicals Holding Company (ECHEM) and Canada's Methanex Corporation - are also preparing to bring in new shareholders to take minority equity positions (MEED 25:11:05).

Paris-based Technip, Italy-based Techint and Germany's Uhde with Oslo-based Aker Kvaerner are understood to have submitted prequalificationdocuments for the contract. A shortlist is due to be announced by the end of April, with invitations to bid to be released at the beginning of May. The estimated $620 million project will produce 1.3 million tonnes a year of methanol.

London-based Davy Process Technology is the front-end engineering and design (FEED) contractor on the scheme. Davy and the UK's Johnson Matthey will provide combined reforming technology. An agreement with Egyptian Natural Gas Holding Company (EGAS) to provide gas feedstock for the plant has been concluded. Methanex has agreed to offtake 100 per cent of the methanol output.

Plans are also under way at EMethanex to bring in additional shareholders. Methanex, which has a 76 per cent stake in the project company, is expected to cede 16 per cent of its shares to other Egyptian shareholders. ECHEM, which presently holds a 24 per cent stake, is planned to transfer half its shareholding to EGAS. According to EMethanex chief executive officer Hussein Khattab, the transactions are due to be completed in the next few weeks.

HSBC is EMethanex' financial adviser on the methanol scheme.

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