MEO Australia signs LOIs with 3 potential Tassie Shoal methanol buyers
Sydney (Platts)--6Feb2013/555 am EST/1055 GMT
MEO Australia has signed non-binding letters of intent with three
shortlisted buyers for up to 8.3 million mt/year of methanol from its
proposed Tassie Shoal project, the company said Wednesday.
The maximum total shortlisted demand exceeds the capacity of the
proposed Tassie Shoal plant off northwestern Australia, but final quantities
to be supplied under long-term contract would be aligned with the project's
methanol production, MEO said. The first phase of the project is expected to
cost $1.488 billion and would produce 1.75 million mt/year of methanol.
MEO received expressions of interest in April 2012 from potential buyers
of the methanol. Since then indicative commercial terms, including methanol
pricing, were provided by the major industry participants, the company said.
The letters of intent that have been executed with three "major
participants in the methanol market with a strong focus on expanding their
Asian businesses," MEO added. The LOIs would provide the basis for the
parties to further develop commercial terms for the sales and purchase of
methanol from Tassie Shoal, with a view to maturing them toward binding sale
and purchase agreements.
Article continues below...
|Sign up to Oilgram News today.
Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.
MEO said it was also in discussions with interested parties on broader
strategic partnerships, including the acquisition of equity in the Tassie
"In this regard, MEO is developing a commercial relationship with an
Asian industry participant on a non-exclusive basis for the purpose of
developing [the project]," the company said. "The Asian industry participant
is a multinational corporation with broad business interests including in
upstream E&P, downstream chemicals and international trading businesses and
is considering taking a majority interest in, and assuming operatorship of,
the [Tassie Shoal] midstream development."
The proposed Tassie Shoal project would produce methanol from high CO2
feedstock gas at a plant located on a concrete gravity structure resting on
the shoal. By designing for high CO2 in the feedstock gas stream, the project
would avoid the need for expensive separation, transportation and
geo-sequestration required for alternative LNG or domestic gas developments,
according to MEO.
For each phase of the project, between 180,000 and 220,000 Mcf/d of gas
would be required, depending on CO2 content, to enable the production of
5,000 mt/d or 1.75 million mt/year of methanol.
MEO has secured Australian federal government environmental approvals
for two methanol plants to be located at Tassie Shoal.
--Christine Forster, firstname.lastname@example.org
--Edited by Wendy Wells, email@example.com