INEOS backs $1.7 bn low carbon methanol project in Texas City

Project Overview

The low carbon methanol facility will be located on INEOS’ Texas City site, leveraging the region’s established petrochemical infrastructure, deep-water port access, and skilled workforce. Sandpiper’s plant is designed to produce approximately 1.1 million metric tonnes per annum (MTPA) of low carbon methanol utilizing natural gas with carbon capture, targeting a carbon intensity significantly below the conventional methanol production benchmark. Up to 300,000 tonnes per year will be consumed by INEOS for its Acetic Acid production.

The project is expected to enter the Front-End Engineering and Design (FEED) phase in Q2 2026, with a Final Investment Decision (FID) targeted for 2027 and first production anticipated in 2030. Total project investment is estimated at approximately $1.7 billion.

Declan Sealy, Business Director, INEOS Acetyls said, “Low carbon methanol is increasingly recognized as a critical fuel and feedstock for the maritime, chemical, and energy sectors. INEOS is pleased to support Sandpiper’s development of this facility at our Texas City plant as it will position us at the forefront of a rapidly growing global market for sustainable fuels. We are excited by the economic and environmental impact this project will create.”

Peter Nassab, Chief Executive Officer, Sandpiper Chemicals, LLC said, “This venture is a defining step in our strategy to build a lower-carbon methanol portfolio. INEOS’ Texas City site offers world-class infrastructure, an advantaged gulf coast location and a talented workforce, making it the ideal location for a project of this scale and ambition. We are grateful for INEOS’s support, and we look forward to bringing this facility to life and delivering real value to our stakeholders.”

Strategic Rationale and Market Opportunity

Methanol is one of the world’s most widely traded commodity chemicals, with global demand exceeding 100 million metric tonnes annually. Demand for low carbon methanol is forecast to grow substantially over the coming decade, driven by its adoption as a marine fuel compliant with decarbonization mandates, as well as its expanding role in chemical manufacturing. Texas City’s proximity to major shipping lanes in the Gulf of Mexico further enhances the project’s commercial competitiveness.

Economic and Community Impact

The project is expected to create approximately 1500 construction jobs at peak activity and 25 permanent positions upon commissioning. The project will generate significant tax revenues for Galveston County and the State of Texas. Sandpiper and INEOS are committed to engaging with local communities, educational institutions, and workforce development programs throughout the project lifecycle.

Environmental Commitment

The facility will incorporate carbon capture and storage (CCS) technology targeting a capture rate of 97% of process CO2 emissions, alongside best-in-class water management and air quality Controls.

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ALCHEMPro News Desk (JP)