hydrocracker

It seems like everybody and his uncle are planning new methanol production capacity in the U.S. The economics certainly are compelling. Low natural gas prices are attracting methanol projects like a magnet, especially to the Gulf Coast; domestic and foreign demand for methanol is rising; and methanol prices are as high as they’ve been in five years. But companies are always looking for an angle, a competitive edge, a chance to make their project the most cost-efficient—and profitable—of all. Today, in “Cheap Trick: ‘I Want You to Want Me(thanol)’”--we consider Valero Energy’s methanol initiative and its cheap trick: a plan to add 1.6 million to 1.8 million tons per annum (MMtpa) of methanol capacity for an investment of only about $700 million. That’s around half what it would normally cost.

Just when we thought that East Coast refining had become an oil company’s equivalent of musical chairs and all the players were headed for the exits, a consortium including Carlyle, original owners Sunoco, and JP Morgan strung together a deal to save the 330MB/d Philadelphia refinery that had been slated for the scrap heap. Can the new consortium succeed? How will they overcome the obstacles that chased the previous owners off the lot? Today we look at why they just might succeed.