OCI and Consolidated Energy Limited Enter into Binding Agreement to Jointly Invest in Natgasoline
14 March 2016
OCI N.V. (Euronext: OCI) today announced that Consolidated Energy Limited (“CEL”) has entered into a binding agreement for a 50% stake in Natgasoline LLC in participation with OCI. CEL, which is owned by the Proman Group (“Proman”) and its long-term partner Helm AG (“Helm”), will inject $630 million in equity and an additional $50 million shareholder loan.
The investment will be made via G2X Energy, Inc. (“G2X”), a subsidiary of Consolidated Energy Limited. An injection of $680 million into the project, combined with OCI’s existing equity of $520 million and shareholder loans of $511 million, will complete the funding requirements for the project.
CEL, a global leader in methanol, will lead the effort in marketing and distribution of Natgasoline’s product. In addition, Proman will contribute key management personnel and will provide technical leadership in operations and maintenance.
CF Industries (“CF”), which entered into a Combination Agreement with OCI on 6 August 2015, has consented to OCI’s entry into the agreement with G2X. As part of the consent, OCI agreed CF has no further obligation to purchase an investment in the project. ?CF is expected to have the option to participate in the project with a stake of up to 50% to be determined at a future date. OCI and CF intend to enter into an amended combination agreement that will reflect G2X’s participation in the project, the revised capital structure and the terms of CF’s option.
Natgasoline is developing a greenfield methanol production facility in Beaumont, Texas. The plant is expected to have a capacity of up to 1.75 million metric tons per annum and will be the United States’ largest methanol production facility. Natgasoline is expected to start production in the second half of 2017.
David Cassidy, CEO of Proman and Chairman of CEL commented: “As a global leader in petrochemical production, logistics and marketing we are very excited to be partnering with OCI in the Natgasoline methanol production facility. CEL, through its investment in G2X, continues to see a bright future for methanol production in the United States. This new production capacity will bring much needed methanol tons into the market in the very near term. This production will allow CEL to better serve all of our methanol customers’ needs internationally as well as in the United States.”
OCI N.V. CEO Nassef Sawiris commented: “OCI is pleased to partner with the Proman Group, and looks forward to benefiting from their technical and commercial expertise in the methanol space, creating significant strategic value for the project. Natgasoline is expected to be one of the most competitive methanol producers globally, with access to low-cost natural gas feedstock in the United States, in what we believe will remain a deficit methanol market for the foreseeable future.”