IFC and Transition Industries announce agreement to develop net-zero world-scale methanol project

Source: www.gulfoilandgas.com 12/7/2023, Location: South America

The International Finance Corporation (IFC), a member of the World Bank Group, and Transition Industries LLC signed at COP28 an agreement to jointly develop the Pacífico Mexinol project, a 6,145 Metric Tons (MT) per day methanol production facility in Sinaloa, Mexico.

When it initiates operations, Pacifico Mexinol is expected to be the largest single ultra-low carbon chemicals facility in the world, producing approximately 300,000 MT of green methanol from captured carbon and green hydrogen and 1.8 million MT of blue methanol per year from natural gas with carbon capture.

Under the terms of the Joint Partnership Development Agreement (JPDA), IFC will share a portion of the project development costs, provide substantial expertise to ensure compliance with the IFC Performance Environmental, Social and Governance Standards (ESG), and leverage its expertise to support the project financing.

Rommel Gallo, Chief Executive Officer of Transition Industries, commented: "We are pleased to announce our JPDA with the IFC and proud to partner on this groundbreaking project. Together, we expect to set a new gold standard in ESG for the development of large industrial and chemicals projects that addresses climate change, sustainably manages natural resources such as water, and works with neighbors to maintain and improve the social fabric of the communities in which we live and operate."

Alfonso García Mora, IFC's Vice President for Europe, Latin America and the Caribbean, said: "At IFC, we attract partners to invest alongside us as we provide capital to companies in developing countries, a process we call "mobilization." By mobilizing capital, we amplify the positive impact of our financing on the lives of people in developing countries. With this agreement, we contribute to the development of a project with the potential to reduce natural gas flaring, treat recycled wastewater, diversify Mexico's chemicals capacity, increase exports and generate employment. At least 40% of the global production of methanol comes from coal. Decarbonizing methanol production is an imperative for IFC."

Pacific Mexinol's responsibility to sustainable resource management and its neighbors extends far beyond the ultra-low carbon production of methanol. The project has been engaging with local stakeholders for over four years, listening to local community members to understand their needs and concerns.

As a result, the project's design includes an innovative water solution that will use municipal wastewater eliminating competition with local freshwater needs. There is also no water being removed from or discharged into the nearby bay – an important local ecosystem. The facility will export methanol through an existing port, requiring no dredging or additional infrastructure.

Pacifico Mexinol is expected to reach final investment decision in 2024 and commercial operations in late 2027. The project is expected to generate an average of more than 3,000 jobs during construction and up to 450 direct and indirect workers during operations.


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