Mitsui & Co., Ltd. ("Mitsui", President and CEO: Masami Iijima, Head office: Tokyo) and Celanese Corporation ("Celanese", Head office: Dallas, Texas), a global technology and specialty materials company, have signed an agreement to establish a new joint venture company at 50/50 share to manufacture methanol at Celanese's plant in Clear Lake, Texas.
As a result of the shale gas and oil revolution in the United States, the gas has emerged as a reliable and competitively priced raw material for methanol production. Mitsui has been looking for an opportunity to participate in this business area in the United States, which is the world's second biggest consumer of methanol. Celanese has been considering the establishment of a methanol manufacturing joint venture with a partner. The two companies recently reached an agreement on the establishment of a joint venture for this purpose pending receipt of all regulatory approvals.
Mitsui has a global sales network, while Celanese is one of the world's biggest users of methanol. As partners in the joint venture, Mitsui and Celanese will build a large-scale plant with an annual production capacity of 1.3 million tons. Previously invested assets at Celanese Clear Lake facility will enhance cost competitiveness of the plant. Mitsui's share of the product will be sold mostly within the United States, while Celanese will use its share in the production of downstream products like acetic acid and derivative products.
Mitsui and Celanese are building a long-term partnership that may include discussion for further joint projects in the future. By linking this initiative to its existing involvement in the U.S. shale gas business, Mitsui also aims to create a gas value chain spanning all stages from natural gas to chemical products. This multi-segment approach involving both energy and chemical will give Mitsui opportunities to apply its integrated strengths.
Methanol is used as a basic raw material in a wide range of industries, including the manufacture of adhesives, synthetic resins and pharmaceuticals. In recent years, there has also been a rapid increase in its use as a raw material of energy related products and ethylene/propylene, especially in China. Sustained demand growth is predicted. Mitsui and Celanese will contribute to growth across a wide spectrum of methanol-using industries by reliably supplying both methanol and downstream products.
Outline of the Joint Venture Agreement
||Production of Methanol
||Wholly owned U.S. subsidiary of Mitsui: 50%
Wholly owned U.S. subsidiary of Celanese: 50%
||Clear Lake, Texas
|Total cost of project
||Approx. $800 million (Approx. ¥80,000mil.)
||Approx. 1.3 million tons
|Start of operations
* LLC(Limited Liability Company) : A form of business entity allowed by many jurisdictions in the United States, which allows for a company to be formed with limited liability and receive partnership tax treatment.
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