Le Lézard
Classified in: Environment
Subject: Contract/Agreement

Transition Industries LLC and Macquarie Group Announce Marketing Agreement for Ultra-low Carbon Methanol Project in Sinaloa, Mexico

Transition Industries LLC announced at COP 28 that it has entered into a Master Services and Marketing Agreement (MSMA) with Macquarie Commodities Trading, an affiliate of Macquarie Group's Commodities and Global Markets business ("Macquarie" / "CGM"), for its Pacifico Mexinol project, a 6,145 MT per day methanol production facility near Topolobampo, Sinaloa, Mexico ("Pacifico Mexinol" or the "Project").

When it commences 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 MSMA, Macquarie is responsible for marketing all the production from Pacifico Mexinol to customers on a global basis in accordance with methanol offtake agreements, the provisioning of financial hedging services as required by the Project, and supporting the Project in commodity planning and contracting for all required feedstock. The MSMA has a term of 15 years from the Commercial Operations Date of the Project.

Rommel Gallo, the Chief Executive Officer of Transition Industries, commented: "We are pleased to announce our MSMA with Macquarie, which provides us with unique access to customers on a global basis across multiple industries. Macquarie's leading commodities platform provides us substantial flexibility to optimally place our blue and green methanol with the right customers that can benefit from our product's low carbon qualities. Macquarie's broader capabilities across financial services, logistics, and risk management enable us to optimize the Project's performance across the value chain."

"Macquarie's CGM business offers capital, financing, risk management, market access and physical execution and logistics capabilities to our global clients," said Aarnoud van Weelderen, Senior Managing Director in Macquarie's CGM business. "We are pleased to have entered into an agreement with Transition Industries to provide a comprehensive solution for their proposed Pacifico Mexinol facility. Macquarie will identify, purchase and deliver low carbon methanol to customers in the chemicals, manufacturing and maritime industries globally, many of whom are focusing on low-carbon feedstocks."

Ramiro Castro, Managing Director, head of Macquarie Group's Commodities and Global Markets business in Mexico, commented: "Macquarie is proud to be playing a key role in a project that will contribute to decarbonization while bringing value and opportunity to communities in Latin America. We are very excited to work with Transition Industries in its quest to expand access to methanol globally. This project is representative of how Macquarie continues to grow and scale our services platform in Latin America."

The International Finance Corporation ("IFC"), a member of the World Bank Group, is participating in the co-development of this global-scale low carbon methanol plant. IFC would act as project co-developer with Transition Industries LLC, and as the co-lead mandated arranger alongside Kreditanstalt fur Wiederaufbau IPEX ("KfW IPEX"). The MSMA and financing for Pacifico Mexinol were announced at a formal signing ceremony for the Joint Project Development Agreement in Dubai, UAE, alongside the COP28 conference.

Pacifico Mexinol is expected to reach Final Investment Decision in 2024 and Commercial Operations Date in late 2027.

About Transition Industries

Transition Industries LLC, based in Houston, Texas, is a developer of world-scale net-zero carbon emissions methanol and hydrogen projects in North America to address climate change and promote environmental and social sustainability.

For additional information about Pacifico Mexinol or Transition Industries, please contact us at [email protected].

About Macquarie Group

Founded in 1969, Macquarie employs over 21,000 people in 34 markets. Commodities and Global Markets (CGM), an operating group of Macquarie, has more than 40 years of partnering with our clients to provide capital and financing, risk management, market access, and physical execution and logistics solutions across commodities, financial markets and asset finance sectors.

For further information, visit our website.

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