On October 11-12th, the USAID Energy Security Project (ESP) hosted a two-day Methanol Suppliers and Traders Coordination Meeting to establish a sustainable long-term approach to supply methanol from the European Union (EU) to Ukraine and improve Ukraine’s domestic gas extraction.
USAID ESP gathered European methanol suppliers, Ukrainian buyers, and logistics and customs stakeholders to learn about the potential of methanol supply to Ukraine. At the event, USAID ESP shared its experience in helping Ukraine to set up a new supply chain for methanol and explained commercial and logistics practices in Europe.
The global methanol market is well-established, highly structured, and very efficient. Europe consumes around 9 million tons, and imports account for three-quarters of the supply. The European methanol market concentrates around large storage terminals in Antwerp and Rotterdam, serving as redistribution hubs for this region. Also, methanol typically barged along the Rhine and Ruhr rivers, serving consumers all the way to Basel in Switzerland.
This first Methanol Suppliers and Traders Coordination Meeting also allowed sellers and buyers to meet in person, establish commercial relationships, and conclude new deals. During the second meeting day, participants visited the Methanol Terminal in Rotterdam, Europe’s biggest methanol logistic hub.
Svitlana Grynchuk, Deputy Minister of Energy of Ukraine, stated at the meeting, “When most European methanol suppliers stopped thinking about their supplies to Ukraine because of Russia’s full-scale invasion, USAID, through its Energy Security Project, helped Ukraine to establish a new methanol supply route from the European Union to Ukraine.”
USAID ESP Gas Sector Lead Justin Goonesinghe said, “USAID funded 6,000 tons of methanol worth over EUR 4 million, which was procured through and delivered with the help of USAID ESP to JSC Ukrgasvydobuvannya, the largest gas producer in Central and Eastern Europe. This is another example of how USAID helps Ukraine’s energy sector remain operational despite the war by establishing an entirely new overland route for European methanol to Ukraine. Methanol is a key chemical necessary for continuous gas production, thereby ensuring continuous gas supplies to households, companies, and industrial consumers.”
As was earlier mentioned by Ukrgasvydobuvannya, methanol is needed to prevent hydrating in wells and pipelines during natural gas production and transportation, testing the new and re-entry of the old gas wells. The company thanked USAID for the assistance provided through USAID ESP, which has significantly contributed to uninterrupted gas production and the accumulation of strategic methanol reserves.