ADI performed an independent assessment of the technical and economic viability of modular methanol plants in North American shale basins. Research explored the cost arbitrage of converting flared or stranded gas into liquid chemical products across a wide range of feedstock pricing. Analysis identified critical risks in process scale-up and the competitive impact of U.S. Gulf Coast imports.
The client
Shale gas technology center
The situation
Uncertainty regarding the commercial viability of modular methanol plants for monetizing remote gas assets.
ADI’s contributions
Economic arbitrage analysis
Evaluated cash costs of small-scale production against historical methanol price cycles and natural gas feed costs.
Technology developer benchmarking
Screened and profiled several startup firms developing proprietary, modular methanol synthesis technologies.
Competitive logistics mapping
Modeled railcar-based transportation costs from the Gulf Coast to Midwest and East Coast demand centers.
Market risk evaluation
Quantified implications of global oil-correlated pricing and large-scale plant competition on modular project returns.
Key outcomes
- Enabled stakeholders to evaluate investment returns and risk profiles for deploying modular gas monetization units.
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