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| Statement |
|---|
| We are well positioned during this period of economic uncertainty with growing cash flow generation capability from G3, and a portfolio of assets that can generate cash flow across a wide range of methanol prices |
| So, we're really pleased to say that we're going to be operating two plants at full rates during this sort of eight-month period |
| And as well, that supports export markets, which we are very well positioned there with our assets |
| Through the third quarter, we saw improving market conditions with stronger demand from certain sectors, as well as moderation in global operating rates, mainly from various supply outages in North America, Middle East, and Southeast Asia |
| Methanol demand improvements were primarily driven by stronger demand in China, with increased demand for MTBE and other fuel applications, as well as improved demand for methanol-to-olefins, with a number of MTO plants restarting operations in the third quarter |
| We are currently seeing very high operating rates across the MTO sector, which we believe is driven by the completion of planned downstream expansions, as well as some improvements in affordability from a higher energy and olefins pricing during the quarter |
| So, all of these developments are significantly improving the domestic gas balances in Argentina |
| Overall, continued high energy pricing and improved supply-demand fundamentals has led to slightly higher pricing throughout the third quarter and into the fourth quarter |
| And we're really pleased that we've got -- we'll have the Titan asset running at the end of next year, and we will shift and create a Titan restart team now that will be focused on getting that plant up, and running safely and reliably |
| We remain focused on delivering strong operational results from our existing assets and completing the G3 project |
| We entered the third quarter in a strong financial position with approximately $500 million of cash and $300 million of undrawn backup liquidity |
| So, it has advantages there |
| So, we're really excited about that |
| We expect both plants to run at full rates from the end of September through April 2024, the Southern Hemisphere summer months, and are increasing our Chile production guidance for 2023 from a range of 800,000 tonnes to 900,000 tonnes to a range of 900,000 tonnes to 1 million tonnes based on improved gas availability from Argentina |
| We have seen some improvement in the olefins market |
| So, we probably -- accounting’s accounting, but we would expect that at some point, we'll also be seeing a benefit of pulling through produced sales as well |
| Steve Hansen Very good |
| We are encouraged by the pace of gas development in Argentina and the continued supply rates from ENAP in Chile |
| I didn't mention it in the opening comments, but there continues to be a lot of momentum in marine fuels |
| Looking ahead to the fourth quarter of 2023, we are expecting higher adjusted EBITDA with a higher realized methanol price and higher produced sales |
| And especially, when MTO is operating at the highest rates, I think we've ever seen today |
| Hassan Ahmed You guys saw a nice uptake across all your regions, obviously Europe -- pricing-wise, Europe's obviously for the quarter, no reflection there as yet |
| So, if we had a better market there, I would expect that would be driving methanol prices higher than where we are today |
| We think that focusing on the non-winter months is the right thing now and over time, we'll also be hoping to improve our gas position during the winter months |
| Increasing gas supply from Argentina allowed us to restart our second Chilean plant in September, earlier than previous years |
| So, gas development is - a lot of success around gas development |
| We've already grown our sales |
| But that is something that we've done before, we have a lot of experience with, and there is that speed advantage in the event that you wanted to move quickly on a project |
| And we are -- we think there's a lot of incentives today to get assets, underutilized assets operating in place, where they are today, and that assets operated really well for us in Trinidad |
| I want to thank our team for their hard work; to ensure that we maintained operations in Trinidad, which is a strategic part of our global portfolio |
| Statement |
|---|
| In the third quarter, we had lower production due to scheduled turnarounds in New Zealand and Chile, and seasonal gas restrictions in Chile |
| Israel has shut in the Tamara field, which has impacted the flow of gas into Egypt |
| Does that mean that you don't have confidence that it'll get better? Is that why -- I mean, if it's challenging, presumably it's challenging in the short-term |
| However, we believe economic pressure remains on this sector under current market conditions |
| The gas situation in Trinidad in the near-term is challenging, which is reflected in the short-term of the new gas contract |
| Adjusted EBITDA was lower, compared to the second quarter due to a lower average realized price and lower produced sales |
| You said that the gas situation has been challenging, which was the reason for the short-term deal |
| I would imagine you switch over from Atlas to Titan, but there might be a hiccup there |
| So, we've seen tonnes of pressure on that sector that we would in a normal, in a kind of mid-cycle energy pricing at $90 oil, we would expect much, much higher pricing |
| Now, if this were to escalate in the region, a lot of things could be impacted, including methanol |
| On Trinidad, I'll talk about the kind of the near-term and the reason we call it challenging is, I think, we talked about previously that the gas market is tight in Trinidad |
| Our experience on plant relocation is that the capital cost savings are really not that meaningful |
| And as you said, we don't have a turnaround in front of us like we do in Atlas |
| So -- but we haven't seen any of those disruptions yet, but that could impact crude, it could impact L&G trade flows, methanol trade flows |
| We're -- you will see, we are buying a lot of product today, which we will significantly reduce with G3 coming online, because we're not going to be growing our sales by 1.8 million tonnes next year |
| And so those could have really meaningful impacts on the industry and -- but we haven't seen any of that yet |
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