The Evolution of the Global Methanol and Derivatives Markets in an

Amoco, BP, Trinidad, China Context (2000-2016)

http://www.slideshare.net/tswittrig/dme-methanol-outlook-for-gas-conversion-amoco-2000
Amoco Gas to Liquid strategy (2000). I was the lead on the corporate GTL strategy team for the SPC.
Monetization of stranded gas around the world was dependent on LNG, but the market wasnt big
enough or growing fast enough to absorb the supply around the world. Most of the industry was pursuing
Fischer Tropsch diesel. For a number of reasons, we chose to pursue giant methanol and DME (big
enough to be cheap enough to compete with gasoline, olefins from cracking, LPG (DME) and LNG (BTUs
on one coast to kw on another coast). Amoco had selected and we were constructing first phase (Titan in
Trinidad) when we were acquired by BP.

http://www.slideshare.net/tswittrig/supplement-to-authority-to-negotiate-atlas
After BP acquisition, we had to regroup to convince BP management (i.e. John Browne) to follow through
on second phase (Atlas megamethanol). This is the strategy paper that Scott Charpentier and I put
forward that released Authority to Negotiate and eventually the project.

http://www.chemicals-technology.com/projects/atlas_methanol/atlas_methanol3.html
Atlas was commissioned in 4Q, 2004. Approved and constructed to make ~6% return for $100/tonne flat
for 20 years at the gate. Methanol price in 2005 was around $350/tonne and went up as high as $800/t
over the next few years. (At $500/tonne for 5000 tonnes per day ($400/t excess), this was $2MM excess
profits). The investors, the gas provider (Trinidad National Gas Company) and the Trinidad government
made billions of $$ from this project.

(Shell and Exxon both built major FT projects in the Middle East that had multi BB $ overruns and years
of delay in startup. Clean diesel is stuff we pump out of the ground now from shale oil. Its a good bet
that no FT plant will ever be built again.)

Atlas megamethanol established the low cost, by far, technology for producing methanol as a basis for
fuels, olefins and DME bottled gas. It has been, arguably, the most successful GTX (i.e., gas to anything)
plant ever built. The technology established as megamethanol has changed the face of petrochemicals
and transportation fuel in China. (Watch this space for Rest of World).

http://www.slideshare.net/tswittrig/deutsche-bank-china-coal-to-olefins-industry-2014
http://blogs.platts.com/2015/02/11/china-coal-methanol-olefins/
Chinas cheapest and fastest growing source of olefins, by far, megamethanol to olefins.

http://www.honeywell.com/newsroom/news/2016/07/china-turns-coal-into-plastic-with-honeywell-
technology
Honeywell has tracked Chinas production of ethylene and propylene since the 1990s. From 1990 to
2015, ethylene production grew 1050 percent, from 2 million metric tons (MMT) to 21 MMT;and propylene
production grew nearly 3108 percent for the same time frame, from 0.74 MMT to 23 MMT.

http://www.plastemart.com/plastic-facts-information.asp?news_id=28200&news=Coaltoolefins-
technology-in-China-could-soon-flood-global-Polyethylene-markets

At Tauber Rosenberg, we are tracking more than three dozen coal-to-olefins and methanol-to-olefins
projects in China, all of which are likely to come on stream by 2020, said Jim Changle editorial director of
petrochemical analysis. Those new plants are expected to add more than 10 million metric tons of
ethylene to the Chinese market. The report showed that the amount of ethylene produced from coal-to-
olefins in China is expected to match the amount of ethylene produced from new steam cracker projects
tied to shale gas developments in North America. We hear a lot of talk about how shale gas is a game
changer in the petrochemical industry, Changle said. And it certainly is. But coal-to-olefins has the
potential to have an even greater impact than shale gas, if China moves forward as planned. Report data
showed that not only is China adding ethylene production capacity, it is adding more than 14 million
metric tons of additional polyethylene capacity between 2015 and 2021, much of which is being fed by the
coal-to-olefins-produced ethylene.

http://oilprice.com/Latest-Energy-News/World-News/Chinas-Growing-Use-of-Methanol-as-a-
Cleaner-Alternative-to-Gasoline.html
Methanol is estimated to be about 15% of transport fuel in China now.

http://www.slideshare.net/tswittrig/bp-china-cas-joint-programs-roles-of-cecc-eil-ceftf

http://www.slideshare.net/tswittrig/announce-creation-of-bp-cas-clean-energy-commercialization-
center-65014765

http://www.slideshare.net/tswittrig/cecc-brochure-shanghai-bi-ke-outgrowth-of-ceftf-tsw-work

Planning, basis, opening announcement, brochure for Clean Energy Commercialization Center (one of
several of the joint projects between BP and China from my work there). CECC later evolved to Shanghai
Bi Ke. Focused on commercialization and implementation of major industrial technologies.

http://nwinnovationworks.com/

http://www.chemweek.com/lab/Northwest-Innovation-Works-to-invest-$7-billion-in-eight-methanol-
plants-in-US_74339.html

Northwest Innovation Works (NWIW; Kalama, WA), a company owned by Chinese investors, has
significantly scaled up its investment and planned methanol capacity in the US Pacific Northwest. Output
will be shipped to Asia, particularly China. NWIW says it is planning a combined eight methanol lines at
three locations, each with 5,000 m.t./day capacity. This plan will give NWIW 14.4 million m.t./year of
methanol capacity to ship to Asia. The commissioning of the first two lines is planned in 2019, with all the
rest to be ready two years later.

NWIWs parent company is Shanghai Bi Ke Clean Energy Technology (CECC; Shanghai), a partnership
between the Chinese Academy of Sciences and Double Green Bridge Hong Kong, (one of the
partnerships I started in China) an investor group comprising members of CECC management. CECC is a
technology commercialization and project development company with a portfolio of projects in the gas-
and synthesis gasto-chemicals and fuels markets.

NWIW will spend a combined $7.0 billion to build the plants, including $1.8 billion at Port of Kalama, the
same amount at Port of St Helens, and $3.4 billion at Port of Tacoma. Funding will come from both US
and Chinese capital in the forms of equity and debt. Product will be exported to Asia for use in methanol-
to-olefins (MTO) production facilities. The company has agreed with Xizhong Island Petrochemical Park,
at Dalian, China, to feed MTO facilities there, and it will supply other coastal locations in China as well.
MTO lines typically use 1.8 million m.t./year of methanol to produce 600,000 m.t./year of olefins. NWIW
has not yet determined who will handle the shipping. Planning is still in early stages, the company says.

NWIW is managed by a team of executives with experience in project development, engineering, finance,
and manufacturing. Its CEO is Simon Zhang (One of my protgs in BP China). Prior to joining NWIW, he
had held a number of leadership roles at BP.

methanol-institute-2016-overview-of-rapidly-emerging-methanol-markets-for-fuel-and-petchems-
around-the-world