G2X secures $680MM in funding for Natgasoline methanol unit in Texas

G2X Energy announced on Wednesday that Consolidated Energy Ltd. (CEL) has entered into definitive agreements for an investment in a 50% stake in Natgasoline LLC in participation with OCI. 

CEL, which is owned by the Proman Group and its long-term partner Helm, will inject $630 million in equity and an additional $50 million shareholder loan. This agreement was contemplated in the participation agreement, which was signed between the parties on March 14, 2016.

The investment will be made via G2X Energy (Beaumont) LLC, a subsidiary of CEL. The 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 entire funding requirements for the project. 

"OCI is pleased to strengthen its partnership with the Proman Group by entering into definitive agreements," said Nassef Sawiris, CEO of OCI. "This partnership creates an international leader in the global methanol space benefiting from the combined developmental expertise of both groups and specifically from the technical and commercial experience of Proman Group. We look forward to our successful strategic alliance in the methanol industry, starting with the fast-track completion of the Natgasoline project in Texas."

G2X says its investment will fund over time, with the initial investment funding on or prior to May 16, 2016.

CEL, a global leader in methanol, will lead the effort in marketing and distribution of Natgasoline's product. In addition, Proman and G2X will contribute key management personnel and will provide technical leadership in the startup, operations and maintenance of the facility.

"Signing the definitive agreement with OCI and Natgasoline is a big step forward for G2X Energy," said Tim Vail, president and CEO of G2X. "This acquisition fulfills one of our core funding objectives to become a major producer in the North American methanol market. The G2X team is excited to partner with OCI and welcomes Natgasoline into the CEL group of companies." Mr. Vail went on to say, "By working together, we can continue to build a world-class organization for the future."

Natgasoline is constructing a greenfield methanol production facility in Beaumont, Texas. The plant is expected to have a capacity of up to 1.75 MMtpy, and it will be the largest methanol production facility in the US. 

Natgasoline is expected to start production in the second half of 2017.

"Proman is delighted that CEL and OCI could join forces on this excellent project," said David Cassidy, CEO of Proman and chairman of CEL. "OCI has done tremendous things to date, and we believe this partnership will be a great benefit to both groups as well as the methanol industry. The addition of the world scale Natgasoline investment to our global portfolio allows our group to expand in North America and to better serve our customers world-wide with high-quality, competitively-priced methanol."

Proman is an engineering, procurement and construction group specializing in managing large EPC projects on a lump-sum turnkey basis in many different countries around the world. Additionally, Proman is one of the largest owner/operators of methanol production in the world and is active in co-marketing and distributing petrochemicals. Proman is present on four continents and in 12 countries, with over 1,500 employees worldwide.