Methanex Corp and Mitsui OSK Lines (MOL) have concluded key commercial terms for the purchase and sale of an equity position in, and the establishment of a strategic partnership involving Methanex’s Waterfront Shipping (WFS) subsidiary
With a fleet of approximately 800 vessels, MOL is one of the world’s largest shipping companies. WFS is a global marine transportation company and operates the world’s largest methanol ocean tanker fleet.
In 2016, WFS took delivery of seven 50,000-dwt methanol-powered product tankers to replace vessels in its fleet. Two of the vessels were owned by Westfal-Larsen Management, three by MOL and the other two by a joint venture between Marinvest, Skagerack Invest and Waterfront.
Under the new agreement, MOL will acquire a 40% minority interest in WFS for US$145M. Methanex will retain the remaining 60% majority interest in WFS and continue to operate WFS as a key element of its global supply chain capabilities.
There will be no change to WFS’ day-to-day operations due to this transaction, and Paul Hexter will remain president. The definitive agreements are subject to formal approval by MOL’s board of directors.
The closing is subject to regulatory approval and is expected by the end of the year after all customary conditions are met.
Through this transaction, Methanex, WFS and MOL will establish a strategic partnership, which will enable Methanex and WFS to benefit from MOL’s broad shipping experience to further strengthen its already excellent shipping operations and capabilities. The strategic partnership strengthens a relationship established over 30 years between Methanex, WFS and MOL who, as mentioned above, in 2016 jointly built the first oceangoing dual-fuel vessel capable of running on methanol.
With Methanex as a world-leading methanol producer, WFS as the world’s leading methanol shipper, and MOL’s vast shipping experience, the parties intend to advance the commercialisation of methanol, including renewable methanol, as a viable marine fuel.
Methanol is a safe, proven, cost-competitive marine fuel for the commercial shipping industry that can meet current and future emissions regulations.
Methanex president and chief executive John Floren said, “We are pleased to expand our relationship with MOL, a world-leading shipping company, which will enable Waterfront Shipping to enhance its capabilities by leveraging MOL’s extensive global shipping experience. We have worked with MOL for over 30 years on methanol shipping since the era of Cape Horn Methanol Ltd, a predecessor to Methanex’s Chile operations, and we are confident our new strategic relationship will help develop the market for methanol as a lower-emissions marine fuel.”
MOL president Junichiro Ikeda said, “MOL is pleased to partner and deepen our long-standing relationship with Methanex, the leader in the methanol industry. This transaction is consistent with MOL’s Environmental Vision 2.1, which regards our active involvement in methanol-fuelled ships as one of the measures for adopting clean alternative fuels.”
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