A joint venture producing methanol in Venezuela for export to Asia, the EU and the US is winding down transshipment through the nearby Dutch-controlled island of Aruba and will revert to direct loadings from the mainland.
Metanol de Oriente (Metor), a venture between Japan's Mitsubishi and an affiliate and Venezuela's state-owned petrochemicals company Pequiven, has been using ship-to-ship (STS) transfers off of Aruba to export its product to meet shipping insurance requirements following an expansion of US sanctions on Venezuela in August 2019.
But Metor said it is now shifting back to less costly direct loadings, using spot and charter vessels, at the Venezuelan port of Jose.
Metor's gas-based business stands out for monetizing a plentiful Venezuelan resource that is produced mostly in conjunction with crude. Much of Venezuela's gas, which once underpinned a thriving petrochemicals and fertilizers industry, is now flared.
The US sanctions regime does not directly target methanol exports, US officials have said, and Metor and Mitsubishi said they are complying with US rules.
The US imposed financial sanctions on Venezuela in August 2017, followed by oil sanctions in January 2019. In August of last year, an executive order from the White House granted the US Treasury broad powers to impose new rules and limitations around doing business with Venezuela. The London-based maritime insurance group P&I Club has described the US policy toward Venezuela as "opaque, potentially fast moving and subject to change".
In Metor's final STS operation for now, the Panama-flagged Kokuka Glorious chemicals tanker, owned by Mitsubishi Gas Chemical affiliate Kokuka Sangyo, recently arrived at Jose, as public shipping data indicate, and is set to transship in Aruba for an Asian destination.
Jose is the main Venezuelan terminal and site of the 750,000 t/yr Metor 1 plant and the 850,000 t/yr Metor 2 plant, which Metor said are operating normally at full rates, with one scheduled turnaround planned for the second half of 2020. The two plants are receiving around 160mn cf/d of natural gas feedstock from Pequiven, according to internal data from PdV Gas, a subsidiary of Venezuelan state-owned PdV that produces the feedstock.
Metor said it books the gas from Pequiven as "debt" to be paid later, when sanctions permit. Pequiven, a former PdV subsidiary, could not be reached for comment.
Mitsubishi and Mitsubishi Gas Chemical each hold 23.75pc stakes in Metor. Pequiven holds 37.5pc and International Petrochemical Holdings has 10pc. The International Finance Corporation (IFC), an arm of the World Bank, holds 1pc, and the remaining 4pc is treasury stock.
