Economic Evaluation of the Methanol Value Chain: Focusing on MTO Plant Development and Toll-Based Olefin Production

Articles in Press

Document Type : Original Article

Authors

1 Allameh Tabataba'i University

2 Islamic Azad University

3 Allameh Tabataba'i University

10.22059/ses.2025.395500.1152

Abstract

In the turbulent and complex landscape of global energy markets, optimal investment decisions demand a deep understanding of the value chain and its relative advantages. As a strategic resource, natural gas should be directed toward value-adding pathways that ensure long-term sustainability. This study focuses on the methanol-to-olefins (MTO) route as a critical segment of the natural gas value chain and evaluates two major investment options: constructing a domestic MTO plant and exporting methanol for toll-based olefins production abroad.Using financial models based on three operational scenarios, the analysis reveals that none of the options reach the minimum expected internal rate of return (IRR) of 15%. High operational expenses, outdated technologies, and limited feedstock pricing advantages are key factors contributing to the economic infeasibility of the options studied.

The results emphasize the need to shift focus toward extended value chain development strategies—namely GTO+ and MTO+—and to design innovative financing and partnership models. Such approaches are essential to unlock the economic potential of natural gas and ensure long-term investment viability in the petrochemical sector.

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Journal of sustainable Energy Systems

Articles in Press, Accepted Manuscript
Available Online from 05 September 2025

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