Material Insights · Understanding the Material World

Methanol: Feedstocks

Why methanol is really a way to sell gas

What this tab covers What it is made from and what it feeds: the raw materials and energy per tonne with their share of cost (linked to the commodity table), who is low-cost and why, and the chemicals made from it.

Methanol is about two-thirds energy cost. A gas plant burns and converts about 29-32 GJ of gas per tonne, so the price of gas decides who is competitive. Coal gasification uses about 1.4-1.7 t of coal per tonne. Where gas is stranded or flared, as in Trinidad, Iran or Oman, methanol is one of the few ways to sell it.

Inputs per tonne

InputQuantity per tonneRoleShare of costSource
Gas Natural gasabout 29-32 GJ (28-30 MMBtu) per t (indicative)carbon and hydrogen source plus fuelabout 60-80% of cash cost (indicative)indicative industry energy use
Tc Thermal coalabout 1.4-1.7 t per t (indicative)gasifier feed and fuel (China)about 50-60% of cash cost (indicative)IRENA (2021, indicative)
Water and oxygencoal routes need an air separation unit and large water volumesgasification and shiftsmall (indicative)indicative
Copper-zinc catalystreplaced every 3-5 years (indicative)synthesisunder 2% (indicative)indicative

Who is low-cost, and why

Lowest cost: Middle East and Trinidad on cheap or stranded gas, then US Gulf on shale gas (about $100/t gas cost at 2025 Henry Hub). Chinese coal plants are mid-to-high cost but protected by integration. European and Indian plants on imported gas are the marginal suppliers; China's MTO affordability sets the price ceiling (Argus).

Raw materials on the commodity table

Gas Natural gasTc Thermal coal

What it is made into

ProductNote
HCHO Formaldehydelargest outlet, about 29% (derived)
AcOH Acetic acidvia carbonylation, about 0.54 t methanol per t
MTBE MTBEabout 0.36 t methanol per t MTBE
C3H6 Propylenevia MTO in China
C2H4 Ethylenevia MTO in China
PMMA Acrylics (PMMA)via methyl methacrylate
Amn Specialty amines and ethanolaminesmethylamines for agrochemicals and solvents
FAME Biodiesel (FAME)methanol supplies the methyl group in FAME
Sil Siliconesvia methyl chloride