1. METHANOL HOLDINGS (TRINIDAD) LIMITED
Domestic Private Sector Challenges for the Development of a Mega Methanol Plant in Trinidad
A MHTL Perspective
July 23 , 2002

2. OUTLINE MHTL PROFILE NATURAL GAS AND THE METHANOL INDUSTRY
M5000 MEGA PLANT
DOMESTIC PRIVATE SECTOR CHALLENGES
CLOSING REMARKS

3. MHTL PROFILE

4. METHANOL HOLDINGS (TRINIDAD) LIMITED
T & T Methanol Co. Ltd.
Caribbean Methanol Co. Ltd.
Methanol IV Co. Ltd.

5. MHTL’s METHANOL COMPLEX
M IV
TTMC II
TTMC I
CMC

6. ROLE OF MHTL Finance Corporate Governance Marketing/ Manufacturing
Shipping

7. MHTL BUSINESS ENVIRONMENT
HIGH CAPITAL INVESTMENTS
COMMODITY TYPE PRODUCT
GLOBAL MARKETPLACE
INTENSE COMPETITION
BUSINESS CYCLES AND PRICING VOLATILITY

8. ASSET BASE NO. OF PLANTS: 4 TOTAL CAPACITY: 2.2 MILLION MT/ANNUM
ASSET VALUE: US$ 1 BILLION
GAS CONSUMPTION (2002): 200 MMSCFD
GAS CONSUMPTION (2004) : 380 MMSCFD

9. MHTL MARKETING MHTL MARKETING HUB AT PT. LISAS RESPONSIBLE FOR:
GLOBAL MARKETING STRATEGY
MARKET INTELLIGENCE
CONTRACT NEGOTIATIONS AND ADMINISTRATION
GLOBAL MARKETING OPERATIONS

10. PRODUCT DISTRIBUTION

11. MHTL METHANOL PRODUCTION AND WORLD MARKET
1998
2002
2005
Total MHTL Production (000’S MT)
1914
2170
4000
Total Trinidad Production (000’S MT)
3020
6575
MHTL Production as % of World Capacity
5.6%
5.8%
10.4%
Trinidad Production as % of World Capacity 8%
17.1%
MHTL Sales as % of World demand
8.3%
7.2%
13.6%
Trinidad Sales as % of World Demand
9.9%
22.4%
MHTL Sales as % of Trade
19.2%
13.1%
19.6%
Trinidad Sales as % of Trade
18.2%
32.2%

12. MHTL’S EXPERIENCE
MHTL FACES THE FULL COMPETITIVE FORCES OF THE GLOBAL MARKETPLACE ALONG ALL ELEMENTS OF ITS BUSINESS OPERATIONS AND MAINTAINS A FOCUS ON CONTINUOUS IMPROVEMENT TO REMAIN COMPETITIVE

13. MHTL’S EXPERIENCE
MHTL HAS BEEN ABLE TO DEVELOP A ROBUST BUSINESS OPERATION RESULTING IN:
CONSOLIDATED LOW COST OPERATION
ATTRACTIVE RETURN ON EQUITY
SIGNIFICANT GROWTH IN ASSET BASE AND DEBT CARRYING CAPACITY

14. SHIPPING & LOGISTICS

15. POINT LISAS LOADING FACILITIES
Savonetta
Pier II
Savonetta
Pier I

16. MHTL TANKER FLEET VESSEL CAPACITY NO VESSELS TOTAL (DWT) 14,000 DWT 2
Goodrich Bay, Gulf of Paria
28,000
17,000 DWT 1
Ojars Vacietis
17,000
30,000 DWT 3
Naparima, Nariva, Maracas Bay
90,000
45,000 DWT
Las Cuevas
45,000
Total
180,000
Additional Cap.

17. STORAGE FACILITIES LOCATION CAPACITY (MT) POINT LISAS, TRINIDAD
200,000
WILMINGTON, NC, USA
23,750
HOUSTON, TX, USA
11,750
ST.ROSE, LA, USA
43,000
QUEBEC CITY, CANADA
19,259
ALTAMIRA, MEXICO
5,000
ADDITIONAL (M5000)
50,000

18. NATURAL GAS AND THE METHANOL INDUSTRY

19. THE METHANOL BUSINESS
A PRIMARY PETROCHEMICAL BASED ON NATURAL GAS CONVERSION
NATURAL GAS AVAILABILITY AND PRICING STRUCTURE KEY TO METHANOL INDUSTRY

20. CHANGING STRUCTURE OF THE METHANOL INDUSTRY
US METHANOL INDUSTRY NO LONGER CONSIDERED BENCHMARK; OFFSHORE PRODUCERS NOW REPLACING TRADITIONAL PRODUCTION IN THE MAJOR MARKET CENTERS

21. TRINIDAD AS METHANOL PRODUCTION HUB
TRINIDAD HAS BEEN A VIABLE LOCATION FOR METHANOL PLANTS BASED ON:
READILY AVAILABLE NATURAL GAS SUPPLY
COMPETITIVE GAS PRICING STRUCTURE
PROXIMITY TO MAIN MARKETS

22. TRINIDAD AS METHANOL PRODUCTION HUB
ESTABLISHED INFRASTUCTURE
FACILITATING BUSINESS ENVIRONMENT
STABLE POLITICAL CLIMATE
PROGRESSIVE NATURAL GAS VISION (GORTT / NGC)

23. M5000 MEGA PLANT

24. WHY M5000? TO MAINTAIN COMPETITIVENESS AS A WORLD CLASS PRODUCER
TO ACHIEVE GREATER SYNERGIES AND ECONOMIES OF SCALE
TO CONSOLIDATE MHTL’S POSITION IN GLOBAL MARKETPLACE

25. OTHER CONSIDERATIONS
TECHNOLOGICAL ADVANCES ALLOW LARGER PRODUCTION CAPACITY WITH IMPROVEMENTS IN EFFICIENCIES AND ECONOMIES OF SCALE
5000 MTPD IS THE NEW WORLD SCALE BENCHMARK
M5000 WILL IMPROVE SHIPPING LOGISTICS AND DELIVERY COSTS

26. OTHER CONSIDERATIONS
GROWTH OF BUSINESS IS BEST OPTION FOR ACHIEVING SUSTAINED EFFICIENCY AND PROFITABILITY
NEW CAPACITY WILL BE BUILT IN ANY EVENT, EITHER BY MHTL OR OTHERS
LOW COST PRODUCTION PLATFORM CAN LEAD TO NEW AREAS OF DEMAND RESULTING IN FURTHER GROWTH IN THE INDUSTRY

27. M5000 PLANT Owner: MHTL Process ICI Low Pressure
Design Davy Process Tech.
EPC Contractor Ferrostaal/Proman
Operator IPSL
Plant Start-up Quarter 4, 2004
Annual Capacity 1.8 million MT

28. M5000 PLANT
PLANNED LOCATION N
TTMC I
M5000
Site
CMC
ATLANTIC AVENUE

29. MHTL CAPACITY TO 2005 TTMC I CMC TTMC II MIV M5000 MHTL M1 M2 M3 M4
Start of Plant Prod
Annual Avg. Plant , MM
Prod. (‘000 MTPY)
ISO
Certification
Plant Design ICI Low Pressure Process
Technology

30. DOMESTIC PRIVATE SECTOR CHALLENGES

31. CHALLENGES MAIN AREAS: PROJECT CHALLENGES – M5000 GAS SUPPLY
DOMESTIC PRIVATE SECTOR ISSUES

32. PROJECT CHALLENGES

33. PROJECT CHALLENGES FINANCING MARKET
AVAILABILITY AND PRICING OF RAW MATERIALS
Project financing 500 million usd, 80/20 financing

34. PROJECT CHALLENGES SHIPPING AND LOGISTICS
AVAILABILITY OF TRAINED EXPERIENCED OPERATING AND MAINTENANCE PERSONNEL
GOVERNMENTAL APPROVALS (TOWN AND COUNTRY APPROVAL, ENVIRONMENTAL CONSIDERATIONS)
Project financing 500 million usd, 80/20 financing

35. GAS SUPPLY

36. CHANGES IN GAS USAGE PETROCHEMICALS NO LONGER THE DOMINANT GAS USERS
NEW AND GROWING EMPHASIS ON LNG

37. T&T GAS USE PROFILE 1999

38. T&T GAS USE PROFILE 2002 Includes increased utilization due to :
CNC start up.
Train 2 Start Up

39. T&T GAS USE PROFILE 2006

40. IMPACT OF CHANGES IN GAS USAGE
POSSIBLE IMPACT ON PETROCHEMICAL PRODUCERS:
REDUCED AVAILABILITY OF NATURAL GAS FOR NEW PETROCHEMICAL PRODUCTION
CHANGE FROM PRODUCT RELATED GAS PRICING STRUCTURE FOR PETROCHEMICALS

41. METHANOL AS A VIABLE OUTLET FOR NATURAL GAS
PRODUCT RELATED PRICING STRUCTURE FOR PETROCHEMICALS HAS YIELDED ATTRACTIVE RETURNS TO GAS SUPPLIER
PETROCHEMICAL RETURNS SHOULD COMPARE FAVOURABLY WITH LNG NETBACK RETURNS WHEN LNG SUPPLY CHAIN COSTS CONSIDERED

42. FUTURE PROSPECTS
METHANOL CONTINUES TO BE ATTRACTIVE AS A LONG TERM INVESTMENT
BUSINESS CONTINUES TO BE CYCLICAL BUT AVERAGE RETURNS MAKES BUSINESS A VIABLE OUTLET FOR NATURAL GAS USAGE
GROWTH PROSPECTS FOR THE INDUSTRY REMAIN ATTRACTIVE

43. GROWTH
EVEN WITH A WORST CASE SCENARIO OF THE TOTAL PHASE OUT OF MTBE IN THE US OVER THE NEXT 2 TO 3 YEARS OVERALL POSITIVE GROWTH IN 2005 AND BEYOND IS PROJECTED
GOOD MEDIUM TO LONG TERM PROSPECTS FOR GROWTH IN NEW APPLICATIONS
METHANOL TO OLEFINS
POWER GENERATION
FUEL CELLS
DME

44. OPPORTUNITIES FROM FURTHER METHANOL EXPANSION
POTENTIAL FOR FURTHER INVESTMENT ALONG THE VALUE CHAIN: SHIPPING, BUNKERING, STORAGE
OPPORTUNITY FOR FURTHER DOWNSTREAM DEVELOPMENT:
MELAMINE
ACETIC ACID
FORMALDEHYDE

45. DOMESTIC PRIVATE SECTOR ISSUES

46. DOMESTIC PRIVATE SECTOR ISSUES
MHTL MAJORITY SHAREHOLDER IS A LOCAL HIGHLY DIVERSIFIED CONGLOMERATE WITH EXTENSIVE LINKAGES THROUGHOUT THE LOCAL ECONOMY
MHTL’S ENERGY INVESTMENTS CAN RESULT IN BENEFITS TO A WIDE CROSS SECTION OF CITIZENS

47. DOMESTIC PRIVATE SECTOR ISSUES
NEITHER MHTL NOR ANY OTHER DOMESTIC PRIVATE SECTOR COMPANY ARE DIRECT PRODUCERS OF NATURAL GAS IN T&T
MAJOR UPSTREAM PRODUCER ALSO HAS DIRECT OWNERSHIP IN DOMESTIC METHANOL INDUSTRY

48. DOMESTIC PRIVATE SECTOR ISSUES
A MAJOR CHALLENGE FACING THE DOMESTIC PRIVATE SECTOR IS HOW TO ACHIEVE SUSTAINABLE GROWTH AND DEVELOPMENT IN THE ENERGY SECTOR
ANOTHER CHALLENGE IS HOW TO ACHIEVE A DIVERSIFIED PORTFOLIO OF PETROCHEMICAL PRODUCTS

49. NEW INVESTMENTS BY MHTL AND SHAREHOLDERS
M5000 METHANOL PLANT P
CNC AMMONIA PLANT P
N2000 AMMONIA PLANT P
PLANNED UREA PLANT
PLANNED MELAMINE PLANT
PROPOSED FORMALDEHYDE PLANT
PROPOSED ACETIC ACID PLANT

50. CLOSING REMARKS
NEED FOR AN ENTITY SUCH AS NGC TO CONTINUE TO FACILITATE A BALANCED PORTFOLIO OF NATURAL GAS USAGE AND TO MAINTAIN SOME FORM OF REGULATORY OVERSIGHT
NEED FOR A BALANCE BETWEEN SHORT TERM RETURNS VS LONG TERM SUSTAINABLE DEVELOPMENT
NEED FOR ENCOURAGEMENT OF DIVERSIFICATION INITIATIVES WITHIN THE NATURAL GAS SUB SECTOR

51. CLOSING REMARKS
THE NATIONAL GAS POLICY SHOULD PROVIDE FOR CONTINUOUS REVIEW OF GAS UTILIZATION RATIOS ACROSS INDUSTRIES TO OPTIMIZE VALUE TO TRINIDAD AND TOBAGO
SOME PORTION OF NEW GAS PRODUCTION SHOULD BE RESERVED FOR PETROCHEMICAL INDUSTRIES TO CONTINUE THEIR DEVELOPMENTAL AND DIVERSIFICATION PATHS

52. THANK YOU