12 methanol global market analysis seuser 20140506stena

- STENA -

Methanol Promotion

Production of Methanol Sustainably and

Related Engine Technology

Workshop - Gothenburg on 6th and 7th of May

Open Seminar on 8th May

09 May 2014 STENA Workshop - Wolfgang Seuser 1

0,0

5,0

10,0

15,0

20,0

25,0

30,0

2013

2018E

2013 2018E

FORMALDEHYDE 19,6 24,4MTBE 8,5 10,5

ACETIC ACID 5,8 6,9MMA 1,6 2,1

MTO/MTP 6,5 15,9GASOLINE/FUEL 14,9 21,0

SOLVENTS 1,5 1,6MISCELANEOUS 7,5 9,8

TOTAL 66,0 92,209 May 2014 STENA Workshop - Wolfgang Seuser 2

Methanol - Global Market Analysis

0,0

20,0

40,0

60,0

80,0

100,0

2013

2018E

2013 2018E

ASIA 42,8 64,2ME - AFRICA 3,4 4,1

EUROPE 11,0 12,5SA - CARIB 1,6 2,2

NA 7,2 9,2

TOTAL 66,0 92,2



04 000

8 000

12 000

16 000

20 000

2013

2018E

2013 2018E

FORMALDEHYDE 6.358 8.904MTBE 2.995 4.266

ACETIC ACID 2.211 3.081MMA 250 389

MTO/MTP 6.481 15.886GASOLINE/FUEL 12.730 16.106

MISCELLANEOUS 1.524 2.455

TOTAL 32.549 51.08709 May 2014 STENA Workshop - Wolfgang Seuser 4

Methanol - CHINA Market Analysis



Methanol Demand

The compounded rate of demand growth for Methanol

2009 - 2014E 10.7 percent

2014E - 2019E admirable 8.5 percent

2019 Demand - 105 mio tons of Methanol,

China - Demand over 66 mio tons

Key Drivers

China - MTO and Gasoline blends today

MTG and power generation gaining interest

Supply Growth via Investments in Asia and the United States

Natural gas price volatility risk is a tangible element of such trade

that will have to be managed


Methanol - Global Market Comments


STENA - Methanol Promotion

CHINA


Chinese car sales quadrupled in 5 years -

Record exports of EU car producers

Chinas 12th five-year plan includes reduction of oil import dependency M15 is incorporated

Coverage of high Gasoline demand has led to high usage of Methanol

Methanol production is linked to increased demand for gasoline

Concern among OEMs regarding engine operation

with increased Methanol levels

Methanol usage for blending is variable and largely unregulated

Methanol - China


Region M5 M15 M25 M85 M100 Other Comments

Nationwide x

Provinces

Shanxi x x x x

Shaanxi x x

Draft - Not yet approved;

M15 Pilot-Project in Shaanxi;

M25 Pilot-Project in Xin,

Baoji,Hanzhong

Zhejiang x M30, M50 M5 Pilot-Project in Quzhou

Hebei xM5 and M15 Pilot-Project in

Tangshan

Shandong M30 M25 Pilot-Project in Weifang

Guizhou x x

Shanghai x M100 Pilot-Project

Heilongjing x

Jiangsu M45

Sichuan M10 Draft - not yet approved

Gansu x M30

Xinjiang x x Draft - not yet approved

Fujian M15 Methanol Diesel blending

Liaoning x Draft - not yet approved

CHINA - Status of Methanol in Fuels - Specification Development

Specification Type

Methanol - CHINA



USA

Methanol resurgence

Lack of Natural gas infrastructure results in liquid Methanol production

Low-cost natural gas caused politics to support that benefit

Large-scale shale-gas extraction for Methanol to Fuel

Open Fuel Standard Act was introduced to direct automakers to have half

of all new cars by the 2017 model year capable of operating on

something other than gasoline,

including Ethanol and Methanol flexible fuel vehicles.

Domestic Fuel Standard should open the market to low-level Methanol fuel

blends

Energy self-sufficiency is target US Gasoline demand can only be covered by imports

Methanol Institute: The Clear Alternative

The Case for Methanol Fuel Blending in the US - January 2014


Methanol - USA

Company Location capacity 2013 2014 2015 2016 2017 2018

OCI Beaumont TX 700 600 700 700 700 700 700

LyondellBasell Channelview - TX 740 60 740 740 740 740 740

Methanex Geismar - LA 1.000 100 1.000 1.000 1.000 1.000

G2X Energy Pampa TX 65 20 65 65 65 65

Methanex Geismar - LA 1.000 1.000 1.000 1.000

Celanese/Mitsui Clear Lake - TX 1.300 200 1.300 1.300 1.300

OCI Beaumont TX 1.750 1.750 1.750 1.750

Valero St. Charles Refinery, Norco - LA 1.600 1.600 1.600 1.600

Leucadia - Lake Charles Clean Energy St. Charles - LA 1.200 1.200 1.200

ZEEP - Zero Emission Energy Plants

SLM South Louisiana Methanol JVSt. James Parish - LA 1.650 1.650 1.650

G2X Energy Lake Charles 1.200 1.200 1.200

Northwest Innovation Works (BP,China) Columbia River Clatskanie, Oregon 1.600 1.600

Northwest Innovation Works (BP,China) Columbia River Kalama, Washington 1.600 1.600

Northwest Innovation Works (BP,China) Tacoma, Washington 1.600 1.600

Celanese Bishop 1.300 1.300

TOTAL 18.305 660 1.560 2.705 8.155 12.205 18.305

Leucadia Moss Point Methanol Moss Point - MS 1000 1000 1000

Timing

US Methanol Production Capacity Planning - all in kMt


Methanol - USA

US -Market GTL Projects known - EnergyCompany Project Location Status

SoCalGas DME Methanol to dimethyl ether (DME) USA, California Announced

Calumet GTL Fischer-Tropsch GTL USA, Pennsylvania Announced

East Oak Landfill GTL Fischer-Tropsch GTL USA, Oklahoma Announced

Marcellus GTL Methanol to Gasoline USA, Pennsylvania Announced

Nerd Gas Co. GTL Fischer-Tropsch GTL USA, Wyoming Announced

Pinto Energy GTL Fischer-Tropsch GTL USA, Ohio Post-FEED/Awaiting Construction

Primus Green Energy STG+ Syngas to Gasoline USA, Pennsylvania Operational

Primus Green Energy STG+ Commercial Syngas to Gasoline USA Announced

Sundrop Fuels Methanol to Gasoline USA, Colorado Post-FEED/Awaiting Construction

Sundrop/Chesapeake XTL Methanol to Gasoline USA, Louisiana Post-FEED/Awaiting Construction

EmberClear Natchez GTL Methanol to Gasoline USA, Mississippi Announced

LaPlace Methanol Facility Methanol USA, Louisiana Post-FEED/Awaiting Construction

Pampa Fuels Methanol USA, Texas Announced

Port of Kalama Methanol Methanol USA Announced

Port Westward Methanol Methanol USA, Oregon Announced

Coal to Methanol Paducah Kentucky

Consumer Methanol

Consumer Methanol


Methanol - USA



EUROPE

Heavy Lobbyism - Negative attitude from OEMs towards Methanol

Standard arguments: toxic, vapor pressure, strongly hydroscopic, strongly to the

formation of azeotrope, require a co-solvent, low energy content, aggressive

For the present car park the use of (bio)methanol, either as fuel or as blending component, is not

recommended by the car manufacturers (even though the FQD and EN 228 allow blending up to 3 %

(V/V) ). For high level blend methanol fuel, the following ASTM specification is available: ASTM D5797

Specification for fuel Methanol (M70-M85) for automotive spark-ignition engines - CEN-TC19 WG38

N1619 - 5 The need for a European automotive standard is not foreseen short/medium

term. Opposition to increasing Methanol content

EU - Legislation

RED mandates that at least 10% of transport fuels on an energy basis shall be derived

from sustainably produced, renewable sources by 2020 (RED, 2009/28/EC)

FQD requires fuel suppliers to reduce life-cycle GHG intensity associated with transport

fuels by at least 6 % by 2020, versus a 2010 baseline (FQD, 2009/30/EC)

EN 228 European Fuel Standard (with co-solvent) allows 3% (by volume) Methanol

EU Commission Proposal

Horizon 2020 - new funds for development of technologies for the disposal of CO2 emission via the Methanol path CCR against CCS, energy second generation


Methanol - EUROPE

Source: Concawe


Methanol - EUROPE


Methanol - EUROPE

Source:

Concawe



Three Regions - Three Different Markets and Setups

CHINA - Methanol for Fuels in Place

2006 / 2013 ------ 1,5 - 13,0 mio tons

Different Business Mode less Talks but decisions

USA - No Fuel Methanol yet - Shale Gas Revolution

Capitalism, Profit, Privacy can own Energy, Lobbyism

EU - ZERO Methanol - Tri-Flex-Fuel Cars

Lobbyism, Tradition, Preconceived Opinion heavy to Modify

Drivers for Alternatives are Climate Issues, Supply Security +

Sulphur Reduction, higher Efficiency drives Octane Need

FUEL for SHIPPING is NEW for METHANOL

Europe - NEW Visible Developments for Methanol

Iceland CRI, Sweden Stenaline, Israel M15, Germany CO2 , Denmark Economy, NL - BioMCN

Natural Gas Coal Biomass CO2 - Emission Electrolysis H2

METHANOL

Syngas

Fuels

others

Chemicals

MTBE DME Biodiesel M-Mix Fuels Sole Fuel

Formaldehyde Acetic Acid Silicons Animal Feed Water Treatment More.more

MTO MTP Fossil Fuels Electricity

Diesel Alternative Diesel Additive LPG Substitute Propellant

Polymers Sulphur free Fuel Production

Storage Option

a long Product Chain incl. Products of Daily Life



Against Oil Methanol is a dwarf

65 mio tons Demand/Year equals almost 6 Days Oil

Recognition in Markets - Importance

Methanol is a Liquide Oil is a Liquide, Gasoline + Diesel are Liquids Methanol is a Chemical - no Energy, only in China its both Logistics are easy we could use exsisting supply structures - REALLY????

Who Ownes Actual Logistics for Transport of Liquids Patrol Stations, Pipelines, Tankers

Methanol offers significant properties to become Fuel -

it was already Fuel 1980 1990, now its ignored, however Ethanol with similar advantages and disadvantages is Fuel

Political will was Key

The EU society subsidized in 2011 Biofuels with 10 billion Euros

even with growing awareness to do wrong




Further Concerns critical Methanol Thoughts Too green to be true

Too optimistic

too long waiting curve

Too less support - still

Too less communication

Too low broad awareness

Too much negativism poison, aggressive, less energy content

What is left to do?

More studies to be better prepared

Enhance communication inform the people Analyse individual scepticism, secure the origin of it

Get awareness that CO2 is really the key climate danger

Convince established energy supply that only a

reliable competitor can guarentee them longer life


Methanol fits brilliant in the set-up

Environmental Compatibility

Economics Operating Efficiency Security of Supply

Innovation

DO WE KNOW THE CUSTOMER FOR

ALL THE SO WONDERFUL FACTS ?

Methanol success as FUEL is not a matter of pricing

There is NO alternative energy around

without support of tax

means - the society is willing

to pay more for energy

however broadly the awareness grow that payments go down the pan

35 years average

20 Dollar

2005 - 2007

threefold

2008 - 2010

fourfold

2011 - ytd

fivefold

0

20

40

60

80

100

120

$ / b

bl

EU BRENT Price History



Average 273 Euro minus Discount

232 Euro



2010 to date

333 Euro minus Discount

283 Euro

Average146 Euro

Currency adjusted

METHANOL

Developing Clean Fuel - Energy Economy

M

e

t

h

a

n

o

l

Efficient Energy Carrier

Reduced Fossil Use

Variable Fuel Systems

Combustion Engine

Various Flexible Vehicles

New Propulsion Methods

Global Availibility

Secured Supply

Domestic Production and Use

Co-Existence with todays

Fuels

Societal Acceptance

Environment Safe

Target-aimed Investment

New Technology and

Processes

Harmonized Systems

Fuel Cell Electricity

Innovation

Integral

Way of a

Fuel - and

Energy -

Strategy

STENA Workshop - Wolfgang Seuser 27

Clean Liquid Fuel/Mix

Multiple Sources

Logistics


09 May 2014



Thank you for the invitation.

I bow deeply and with all respect for the courage and commitment of

Mr. Dan Olsson

on his way to make Methanol to energy.

Mercedes Benz could not introduce almost a dozen years ago,

the Methanol fuel cell.

Nowhere in the world, apart from China and Iceland, is Methanol fuel.

Now Sweden becomes the location of choice

for an epochal step across the energy world.

I wish this workshop all success and am proud to be an attendee.

Wolfgang Seuser


Erscheinungstermin: 21. Februar 2014 ISBN-10: 3642397085 ISBN-13: 978-3642397080 Methanol - The Chemical and Energy Feedstock of the Future offers a visionary yet

unbiased view of methanol technology.

Based on the groundbreaking 1986 publication "Methanol" by Friedrich Asinger, this book

includes contributions

by more than 40 experts from industry and academia. The authors and editors provide a

comprehensive exposition of methanol chemistry and technology which is useful for

a wide variety of scientists working in chemistry and energy related industries as well as

academic researchers and even decision-makers and organisations concerned with the future of chemical and energy feedstocks.

Methanol Institute:

The Clear Alternative

The Case for Methanol Fuel Blending in the US - January 2014

12 methanol global market analysis seuser 20140506stena

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