Petronas will likely reduce operating rates at its 1.7 million mt/year methanol plant at Labuan to 50-80% in September, from 80-90% currently, while performing repairs on the pipelines that supply the plant with natural gas from the offshore Kikeh field, a source close to the company said Monday.
The methanol plant was shut July 17 following a cut in the supply of natural gas, which forced the company to declare a force majeure on methanol shipments on July 19. The plant was restarted in the last week of July and the force majeure lifted on August 10. But plant runs have been unstable since the restart, said the source.
During the September shutdown, the company will shut a few pipelines at a time, but will -- if necessary -- perform maintenance on close to all of the 20-30 pipelines from the offshore Kikeh field, the source said.
While the company hopes to operate the plant at reduced runs during the shutdown, there is a possibility that the plant will have to be shut during the repairs, the source added.
Asian methanol prices have been on the rise since problems surfaced at the Labuan plant. Methanol CFR Southeast Asia closed at $262.50/mt on August 20, up 4.4% from $251.50/mt on July 19, while methanol CFR China jumped 13.7% to $270.50/mt over the same period.
The company also has an older 660,000 mt/year methanol plant at Labuan, which has been idled since July 2009 due to a water shortage.
