Sandra Daycock - Director of Investor Relations John Floren - President and CEO.

Daniel Jester - Citi Jacob Bout - CIBC Steve Hansen - Raymond James Joel Jackson - BMO Capital Markets Ben Isaacson - Scotiabank Hassan Ahmed - Alembic Global Laurence Alexander - Jeffries Robert Kwan - RBC Capital Markets Charles Neivert - Cowen and Company Cherilyn Radbourne - TD Securities Brian MacArthur - UBS Chris Shaw - Monness Crespi.

Ladies and gentlemen, thank you for standing-by. Welcome to the Methanex Corporation First Quarter 2015 Results Conference Call. I'd now like to turn the conference over to Ms. Sandra Daycock, Director of Investor Relations. Please go ahead Ms. Daycock..

Thank you. Good morning, ladies and gentlemen. Welcome to our first quarter 2015 results conference call. Our 2015 first quarter report along with presentation slides summarizing the Q1 results can be accessed at our Website at www.methanex.com.

I would like to remind our listeners that our comments and answers to your questions today may contain forward-looking information. This information is by its nature is subject to risks and uncertainties that may cause the stated outcome to differ materially from the actual outcome.

Certain material factors or assumptions were applied in drawing the conclusions or making the forecast or projections, which are included in the forward-looking information. Please refer to our latest MD&A and to our 2014 Annual Report for more information.

For clarification, any references to EBITDA, cash flow or income made in today’s remarks reflect a 63.1% economic interest in the Atlas facility and our 50% economic interest in the Egypt facility.

In addition, we report our adjusted revenue, adjusted EBITDA and adjusted net income to exclude the mark-to-market impact of share-based compensation and other non-operating items.

We report our results in this way to make them a better measure of underlying operating performance and we encourage analysts covering the company to report their estimates in this manner. I would now like to turn over the call over to Methanex’s President and CEO, Mr. John Floren, for his comments and a question-and-answer period.

John?.

Good morning. In Q1 2015 we achieved adjusted EBITDA of $97 million and adjusted net income of $21 million or $0.23 a share. Earnings per share were about $0.20 below consensus, the main reasons for the difference in achieved earnings per share versus estimated earnings per share were as follows. We have just over $100 million in non U.S.

dollar net assets on our balance sheet and when the U.S. dollar appreciates this generates a foreign exchange loss. In Q1 this foreign exchange impact was approximately $9 million. Although we experience this loss in the quarter a strong U.S. dollar has a net benefit to the company. We’ve approximately $150 million per year of non U.S.

dollar costs in our cost structure. Over the year our lower relative costs were more than offset this one time foreign exchange loss in Q1. In addition in March 2015 we repaid a $150 million bond originally due in August of this year from cash off of our balance sheet.

In effect we prepaid interest in the amount of $3.2 million which were recorded as a finance expense during the quarter and was not anticipated by analysts. Also volumes of produced product were lower than expected due to production outages in New Zealand and Egypt and this increased cost and lowered margins.

We achieved a major milestone for the company with the successful startup of our new facility in the United States. We delivered and sold our first methanol from our Geismar 1 facility during the quarter. The plant operated exceptionally well and produced 180,000 metric tons and is running today at a rate of over 3,000 tons a day.

This is a fantastic achievement by our entire organization. We’ve also made solid progress on the construction of the second plant which remains on target for startup in late Q1 2016. The remaining capital spend for Geismar 2 at the end of Q1 was approximately $265 million.

We believe the revised budget of $1.4 billion for completion of both plants is achievable. During the quarter we returned over $70 million in cash to shareholders in the form of dividends and share repurchases.

Regarding the normal course issuer bid initiated May 6, 2014 as of today we’ve purchased approximately 5.7 million shares or 6% of the public float. Today we announced a new normal course issuer bid of approximately 4.6 million common shares or 5% of issued and outstanding shares at April 29, 2015.

We also increased our dividend by 10% to $1.10 per year which equates to a meaningful yield of approximately 2%. The establishment of a new normal course issuer bid along with the increased dividend builds on our solid track record of returning cash to shareholders.

We believe that buying back our own production capacity continues to be an excellent use of capital and we’ve strong confidence in our ability to generate solid future free cash flows from our business. During Q1 demand contracted modestly versus Q4 of 2014.

We saw a seasonal slowdown in traditional chemical applications during Chinese New Year celebrations. Also lower energy product prices reduced methanol affordability into certain energy applications notably dimethyl ether, methanol to propylene and methanol to gasoline.

Contract prices stabilized in margin have moved higher at the beginning of Q2 helped by a recovery in oil and related product prices which raises methanol affordability into new energy applications.

Another new MTO plant started up in the quarter and there are now a total of 8 completed merchant MTO, MTP plants that can consume up to 9 million tons of methanol.

There are an additional 8 MTO, MTP plants under construction that are planned to startup over the coming 15 months which will add an additional 10 million tons of methanol demand at full operating rates. During the quarter Stena Ferry has completed the conversion of the first methanol powered ship engine on a Stena Germanica Ferry.

Stena anticipates that the three remaining engines on the Germanica will be converted later this year. This is the first ship in the world to be powered by methanol. Our methanol production including tolling volume in Q1 was 1,264,000 metrics tons versus 1,207,000 metric tons in Q4 2014.

In New Zealand two of the plants undertook unplanned downtime due to mechanical issues. The combined impact of these outages led to approximately 80,000 tons of lost production. Our Medicine Hat operation continued to be constrained by mechanical issues and production remains approximately 10% below capacity.

We expect to bring the plant back to full capacity following the major refurbishment scheduled for later this year. During the quarter we made progress in locking up about 40% of our natural gas requirements for Medicine Hat through the year 2019.

We operated the Egypt plants for only six days during the quarter due primarily to gas constraints which compares to a relatively strong gas deliveries in Q4 2014. We believe the deterioration in gas availability is due primarily to the extensive upstream maintenance programs combined with delivery declines from the upstream fields.

The maintenance programs are both corrective and preventative in nature and follow multiple years of delaying the maintenance activities to maximize supply.

In late February we were provided with gas to restart however we experienced a technical problem during the plant startup which required approximately three weeks to repair by which time gas was no longer available.

We have been advised by our gas supplier that supply should be available for our restart mid May following the commencement of LNG imports and we expect to operate at reduced rates until the peak summer gas demand period starts and we will likely be required to shut down again.

There’s too much uncertainty to give specific guidance on operating rates in Egypt. In the near term we expect [intermittent] [ph] operation of the plant when gas is available during the non-peak gas demand months.

However, we are optimistic that recent developments for upstream gas supply in Egypt will result in improved gas deliveries in the medium term. In Chile we operated one plant at a rate about 30% for Q1. We anticipate we will have to shut down the operation at some point later in Q2 as we enter the winter season in the Southern hemisphere.

We expect that there will be sufficient gas available to restart the plant after the winter. We believe that our good medium term prospects that promise to bring new Chile based gas into the market and we believe our two Chile plants could run at higher rates in the future.

In Trinidad, overall production was higher in Q1 versus Q4 due to better plant operations. Gas curtailments continued this quarter at a rate of about 15% and we anticipate these levels of curtailments for the foreseeable future.

Although this has been a very disappointing quarter for earnings we forecast improving industry conditions and asset performance in the coming quarters. I would now be happy to take any questions..

Thank you. [Operator Instructions] The first question is from Daniel Jester from Citi. Please go ahead..

Good morning, John. So in Trinidad one of your competitors recently announced they are going to partner with NGC, to build a new methanol plant in the country.

So given all the gas issues that we have seen over the past few years, do you think that projects announced in the country are a sign of confidence that even though in the near term the gas situation in Trinidad is still uncertain, the long term gas situation is set to improve?.

Yes, that’s been our position for some time. I think there wasn’t a lot of investment in the upstream for some time in Trinidad due to the economic differences between the upstream and the government.

There has been recent investments and we see the restrictions for the - I said the foreseeable future but there - some of the projections we have seen in the 2016-17 period looked to be quite positive but there is a lot of water to flow under that bridge yet.

As far as other announcements you probably have to talk to Mitsubishi and others about their intentions. I was interested though in the announcement that they are talking at this point a $1,000 a ton for capital even in Trinidad so it’s hard for me to comment on some of these other announcements..

Okay. And then two quick questions on hedging I guess for the Medicine Hat, the 40% you’ve locked in through 2019 if you can give us any details about the structure of that or what the average cost were you able to lock in, and then any updated thoughts about locking in gas at Geismar 2 once it comes online next year. Thank you. .

Yes, the Medicine Hat market is quite different than – Henry hub there, it trades at a discount; you can look at the forward curve, you can look at where gas has been trading, around that $3 range and $3 it gives us a cash cost of around 170 a ton in a market where we sell it all within most of the year, within a couple of hundred miles, so pretty nice economics, and as we do the major refurbishment there we will get some extra production than what we have been experiencing lately, so again, we are just really happy with that plant; we call it the jewel on the [Ferry] [ph] and we are just going to continue to generate strong earnings for our shareholders.

G2, we are not as anxious to tie up that plant for gas as G1. I think I have mentioned before that for G1 we had to hire 130 people and having a 10-year gas contract that give us some certainty about our future was important.

Certainly for G2 where the market has changed again unlikely that we would sign a methanol linked contract at this time but we never say no. We are looking at financial instruments to give us some sort of average cost of around $4 for the next 10 years, a bit lower in the first five, bit higher in the second five.

The curve is pretty liquid in the first five years but then it gets pretty thin. So our team is looking at that and certainly in the current environment with three to four year payback period on that operation the current gas market looks quite attractive..

Great. Thanks a lot..

Thank you. The following question is from Jacob Bout from CIBC. Please go ahead..

Hello John.

What is the scope of the work to be done at Medicine Hat and how long do you think it would be down and are you still thinking about building another plant there?.

Yes, so Medicine Hat is not [very dissimilar] [ph] to what we did in New Zealand. I will remind you that when we started Medicine Hat up in 2011 we had a three year run in front of us, we couldn't see what we see today on the gas market in North America so we invested about $50 million to get the plant going.

We didn't do everything to make it really robust and long term so we knew that at some point we would have to go in what we call a major refurbishment which is really overhaul, it’s not a normal turnaround including replacing all the tubes and redoing the converter and it’s a big job but once it’s done we will get more production and it should be very reliable for the next 10 to 15 years.

So our view of Medicine Hat operation now is no longer three to four years, it’s long term like our other plants. So you should expect the turnaround to last in the order of around 60 days major refurbishment and we’ve mentioned around $100 million in capital..

And as far as building another plant there?.

Oh, sorry. Yes. So we continue to look at - it’s a great place to build specially in the current environment with the downturn in the oil industry.

The big challenge Jacob is railing the product to the coast to get it to Asia and we have been unsuccessful in negotiating with the railway company that services that plant site a long term deal that will allow us to underpin our economics for about 10 years.

So we are working hard on that but we don't want to find ourselves into a position like the oil sands where they built a lot of production and they don't have a way of getting it out of the country in an efficient way.

So we are continuing to work hard on that and we are lot more optimistic today with the current labor environment and gas environment at Medicine Hat..

Second question, just on the strategically how do you think about market share in the methanol industry.

Do you look at maintaining it [indiscernible] optimal market share and then maybe from a board perspective does this market share play into when you think about a newbuild?.

Yes, leadership is extremely important to us Jacob and we like to maintain leadership. We are adding 3 million tons in three years to enhance our leadership position with none of our major competitors are billing capacity in the same time.

The market is predicted to grow somewhere between 7% and 8% per year in order for us to keep our current market share we need to add about a million tons every two years, that's what we like to do, that's in our vision. We have added 3 million in three years so there is no rush for us to go and add new capacity to keep our current market share.

We are enhancing it and I think there are opportunities especially in North America for us to look to build new capacity, Brownfield at the appropriate time, but there is nothing imminent at this particular time. .

Thanks a lot John..

Thanks Jacob..

Thank you. The next question is from Steve Hansen from Raymond James. Please go ahead..

Good morning guys.

Quick one on some of the operational issues we had here, just on New Zealand particular, any of those issues expected to persist going forward or those are sort of one time in nature for the quarter?.

Since they are all unplanned we don't have unplanned outages in our forecast, so these three plants are little bit older in nature and we’ve refurbished them. There is issue that crop up from time to time and I think what we look at 2.2 million tons for the three plants is pretty well what we would hope to take it out them in a year.

They certainly operate on a daily basis on higher rates than that but we put in these forecast unplanned timeouts during the year and it’s hard to forecast when those are expected.

If you look at Q3 last year we produced 600,000 tons in New Zealand for the quarter which has a run rate 2.4 million, so it’s really hard to predict, but I would say I’m comfortable at 2.2 million tons for the three plant operation, is a good number until we get the higher CO2 gas..

Okay, that’s helpful and just a follow up on the capital allocation of returning share, returning to shareholders, the buyback of 5%, I’m just curious looking at your free cash flow profile that’s ramping would suggest that you could have done more than 5% any reason you didn’t decide to go to 10?.

Well, we can go to 10 at any time.

So it gives us flexibility to do five, I can't predict the future nobody told me oil is going to be 40 last August and the appropriate methanol price as you recall is in the mid 200s for awhile, so I can't predict the future where being prudent and if we complete the 5% and you should expect us to announce another 5%.

We still have the capital in front of us on G2 and I mentioned the Medicine Hat refurbishment. So why put out 10% at this point when you have a flexibility to add another five at anytime..

Okay. Very helpful. Thanks..

Thank you. The next question is from Joel Jackson from BMO Capital Markets, please go ahead..

Hi, first question on G1.

Can you maybe give a bit of color in the first month or two of operations here, how much sales you will be able to do from G1 maybe with the mix has been domestic versus export and if you have been able to make up maybe some of your last sales at Egypt with G1?.

Yes, G1 has been absolutely fantastic. So its ran from the time we started at very high rates and it continues to run at very high rates.

So we are extremely happy with that project, it ran at higher rates and we refer casting in the first quarter, this crazy accounting that we have with these vital layers on inventory all the products that we produced and probably the first and second quarter is not going to flow exactly through into EBITDA or in those particular quarters but overtime that will normalize and whatever we produce is what we should sell.

So it’s probably going to take a couple of quarters to balance that out, as far as what we are doing with the product we probably don’t want to comment on that and what I would say is Geismar 1 – and 2 will add to our global supply chain and allow us to even improve our flexibility and ability to supply our customers globally no matter what happens to us.

So that’s our strength reliable quality supply Geismar only enhances that and we have our leaderships, our terminals around the world and we will utilize them to the best use of them to get the best pricing for our shareholders..

Okay and then second question just on G2 you reiterate the guidance to have methanol produced at G2 by late Q1 of 2016 what is the opportunity here that you can move that schedule up beyond the timeline when G1 came on after all the equipment was delivered some of that math would suggest that G2 should be up at some point in Q4 what are the opportunities to increase that schedule.

Thanks. .

Yes, it’s all about productivity. You can always move schedule but that means adding more people to the site, adding more people to site lowers productivity. So I think right now we are pretty happy with where we are at on the progress of that project.

I will remind you it’s not just a mechanical completion of the project but there is gas pipelines, there is logistics to get the product out which are all on the timeline at the end of Q1 2016, so we will optimize the schedule based on cost and EBITDA generation of the molecules that we can produce out of that plant and we are still very comfortable with the schedule and if we think it’s a right thing to do to beat in the bit then that's what we will do.

So I think by the end of the next quarter we will be in a position to give you better guidance than the end of Q1 2016. Right now I am still very comfortable with that guidance..

Thank you..

Thank you. The next question is from Ben Isaacson from Scotiabank. Please go ahead..

Thanks you. Hi, John. I have two questions on Egypt. The first one is you mentioned that there is a project that's been announced for a capital cost of roughly $1000 a ton. If I remember correctly I think you built the plant in Egypt for maybe it’s about $700 or $750 a ton but you sold 10% stake for about $1200 or $1300 a ton.

Is there an opportunity for Methanex to de-risk Egypt by monetizing that 50% stake, is there a market there?.

Okay. Well, first of all thanks for your headline this morning, forgettable quarter I thought that was quite creative. So I appreciate that I mean [indiscernible] 6 AM so thank you.

As far as Egypt goes, we were very happy that we monetized 10% of it at $1200 a ton I think if you had somewhere in August on the door and made that kind of offer tomorrow it’s something we would have to think about but Egypt is an important part of our global supply chain. It’s an important part of our global footprint.

It is pretty difficult right now and it’s been difficult for the last few years because of the revolution and the change but I am optimistic where I would see from the government there I think they are really focused on getting the country right, getting things back to situation where tourism is back and really to get Egypt to be a major player in the middle East.

So it’s going to be difficult in the short term but I think gas is there. It’s around 60 TCF there is $24 billion in announced exploration development since March so people are spending real money and when people spend money and the reserves are there, there they get developed.

So I think it’s too early to panic about Egypt and it’s an important part of our global footprint and if we came to position sometime years down the road that we had a different view then we might consider that.

We are all considering all options that will add to shareholder value but I think it’s a little early to panic about what's happening in Egypt..

Okay that's great and then I guess just as the follow-up and you have answered it already. Can you just talk a little bit more detailed about the recent developments in terms of upstream gas supply that kind of gives you confidence over the midterm, I mean what specifically are you seeing right now..

Well, BP announced the $12 billion investment program and they are the serious player in the region.

They are large supplier there so that gives me confidence I think what I see between the government the upstream and the willingness to pay a bit more for gas than they traditionally have been and others in the region shall and others spending money so DG which is and maybe now shell as well.

So I think for the first time in years we are seeing really major investments and the current gas supply demand profile doesn't look too attractive but the gas is there, there is more exploration happening that area is quite perspective there has been new blocks left and the people in the current oil and gas environment are willing to spend $12 billion of their capital that gives me confidence that there must be pretty optimistic that there is gas and oil there that they can recover and make money on.

So it’s not our business but we just are very happy to see these kinds of announcements..

That's great. Thank you John..

Thank you. [Operator Instructions] The following question is from Hassan Ahmed from Alembic Global. Please go ahead..

Good morning, John. You know quick question on the near term supply demand side of things. Obviously there have been a series of outages obviously Egypt is out there, as I understand it in Azerbaijan, Venezuela, Malaysia and the lake.

Now as these facilities come back online, do you think demand is strong enough to basically offset this incremental supply for things to be sort of relatively snug and pricing to sort of continue its ascent obviously barring any sort of further declines in crude oil?.

Well, I can't predict the future and I won’t but I would say is if you look at the operating rates for the industry they are pretty similar to what they have been in the last eight to ten quarters and until we see it better we are not going to plan on anything different and we don't know which particular plants are owned or our competitors that are going to run or not run.

It seems to be most of the issues are related to gas in Venezuela and Malaysia and Azerbaijan and other places so we have our gas issues, we are public company, we are pretty open with our gas issues. Other companies aren't because they are not public. So we are aware of gas issues in many places around the world.

We are above the cost curve today in China we are three fortyish, three fiftyish per ton the cost curve still in that 3 to 320 so that tells me that demand is really driving the price and there is wrap more of these MTO projects coming on the MTO affordability today is over $400 a ton in methanol so they are running at hard rates.

Impact stays the same as it is today which is impossible to predict the price of ethylene, propylene and all the associated derivatives then we would expect pricing to remain quite robust but it’s really hard to predict the future. .

Fair enough and as a follow-up obviously lot of headlines around easing sanctions on Iran and the like have you guys seen more Iranian product hit the export market?.

No and that Iran has produced what it can produce for the last five years it’s got 5 million tons of productive capacity. It produces around 3.5 a year and that hasn't changed with sanctions or no sanctions.

Work with the methanol has gone for a period all it went to India and China were seeing a little bit in the last 12 months finds its way into the Mediterranean but I would say very little.

So unless there is deal and the deal is followed for some time and there is relief on the sanctions for some time and you see significant investment in the gas upstream in Iran and possibly some of these long announced methanol plants starting to move forward.

It’s year and years away before we will see a change in the production volumes in Iran although you may see a bit more product flow to Europe if sanctions are released and things normalized..

Very helpful. Thanks John..

Thanks Hassan..

Thank you. The next question is from Laurence Alexander from Jeffries. Please go ahead..

Just one quick one when do you expect to get some material update from span out so that you can start getting a sense for plausible adaption for the net market?.

Sorry I didn't hear the question Laurence. You are kind of breaking up. .

Sorry. When do you are expecting to get sort of a data from span – that you can start to get a sense for what a plausible demand curve might be in the North Atlantic market..

Yes, that question around stand and so the ship is running on methanol and then running successfully they are going to convert the other for engines and their plan, their original plan was to convert 25.

So I would say this year we will have very good data on how those four engines are performing on the Germanica and depending on their view of relative future prices for the substitute for methanol they will move forward and converting it up so I think they are still very happy with the conversion, they certainly got a lot of press positive press for it as well as ship owner of the year and I’ll remind Stena’s big view on methanol is it is renewal and I think when they look 20, 30, 40 years down the road that was a key point for them as they look to convert from bunker fuel.

So I think that project has been a great success when I started talking about it three years ago nobody believed that it would happen and here we are so let’s see how things unfold this year. .

Thank you..

Thank you. The next question is from Robert Kwan from RBC Capital Markets. Please go ahead..

Good morning. Just on the MCIB John in the previous MCIB messaging was basically you are just going to be in the market very regularly and the intention was to buy back the entire amount.

Is that what you are expecting or was that kind of the board decision for this MCIB and I guess did that also factor into and how do you balance the [indiscernible] dividend increase?.

Yes, we will be in the market every day. That's what we have always done the normal [indiscernible] we will be taking times to be in the market or not to be in the market. We maintains the number of shares that we’re looking to purchase. There are blackout periods for this is well like blackout periods for other things.

So I would think we announced that bid our intention is to complete it. The speed of completion we never talk about and we look at our free cash flows and our other uses of cash and make decision on what’s the best use of that cash for our shareholders and that's what we will do with this one. .

Okay and so that was all part and parcel as well as to [indiscernible] board was also thinking about maintain the dividend increase?.

Yes, the board in our – it’s a very aligned on uses for cash so three years for cash, grow the company, we have spent a lot of cash growing this company for three million tons in the last three years probably close to [$2 million] when you add it all up, we wanted a meaningful sustainable drawing dividend and we look at it every year around the AGM period, our AGM is today and we’ve seen anonymous support to increase it by 10% and access cash beyond those two things will go to share buybacks and higher the methanol price the more we can produce, the more we are going to have to buy back shares.

So it’s a fairly simple equation. We are not looking to diversify the company or to get into other things. So we will stay focused on methanol so how much cash we have will be determined by the price of methanol and how much we can produce..

Okay.

And just last, you mentioned in your comments Medicine Hat expansion and comments almost sounded like the real contract was one of the big hurdles if you were to get that is your sense that you can complete the capital a lot closer to where you are trading in terms of enterprise value per ton or is this kind of just balancing that desires you set to maintain market share and this is probably one of the better lower risk, lower cost growth initiatives in the portfolio?.

I think if we look at our cost per ton on our portfolio it’s a little misleading it’s around 750 to 760 tons but not all tons are created equally what we are finding North American tons are lot more valuable to the market and to us than some of our other tons.

So I think produce our billing and producing methanol in North Americas is from a risk point of view and from gas security point of view a lot different than some other places. So I don't think all tons are created equal. We still use that $1000 a ton when we look at our estimates.

Now can you execute on that or not well again we continue to see cost over runs in this industry -- not in our industry but in the EMP industries in North America so although there has been let’s say a pause in the increases in labor, the productivity is still not great and labor rates are still pretty high when you compared to other parts of the world.

I think there is a pretty unique opportunity right now because of the turndown in the oil and gas industry and labor becoming available that it might make sense if we can get this real situation resolved which is the big F that we could execute something in Medicine Hat.

You shouldn't expect us to make a decision on that sometime late this year or early next year. .

Okay, great. Thank you very much John..

Thank you. [Operator Instructions] The next question is from Charles Neivert from Cowen and Company. Please go ahead..

Good morning guys. Two quick questions.

One, with Egypt offline and obviously constrained at least for another quarter what are you buying, I assume you are buying more than you typically would in the marketplace does this mean that when that gets back to more normal operations that we should see some fairly significant drop in purchasing now that at least Geismar 1 is in and Geismar 2 is sort of around the corner and then second question just on the follow-up can you give me a quick rundown on what – you talked about how much CapEx remains on Geismar 2 but what’s the number for this year and how does – what is the sort of trajectory look like for next year particularly once Geismar 2 is running?.

On our purchase product our target goal is once G2 is running is to, we selling about 80% of our own produced product, 10% off take from other people and 10% spot that’s what we are headed to and certainly when you have on plan averages whether it’s today or when we get to that goal you will be only buying a little bit more and that’s probably what you should expect.

So the answer to your question is yes if G2 comes up you should expect us to see the amount as a percentage of our sales up, purchase product go down.

As far as the second question which is regarding the capital spending I had mentioned we have 265 to go on Geismar 2 we have got about 100 million for Medicine Hat refurbishment, not really anything else this year, next year we will be in a more normal state what I have got it to is with any new growth projects you should expect us for every million tons of operating capacity to be spending $10 million a year over the turnaround cycle of our plants.

So we have 8 million tons operating you should expect $80 million..

Okay.

And some of that 265 is going to be hang up in the first quarter of ’16 now, right?.

It depends on when it gets completed..

Right, right.

Assuming you are on your current schedule?.

Yes..

Okay, that’s it. Thanks..

Thanks Charles..

Thank you. The following question is from Cherilyn Radbourne from TD Securities. Please go ahead..

Thanks very much and good morning.

I wanted to ask about the eight additional MTO plants which you have mentioned in your outlook commentary that are scheduled to come on over the next kind of 15 months, can you just give us some color based on what you know about the cadence of those plans coming online?.

Sure. Just let me get my data.

Yes, so there is eight coming on between now and the first half of next year and the combination of MTO and MTP and our current luck is having one coming on in the commissioning stage and MTP plant starting up this quarter and then two MTO plants starting up in the third quarter, a further two in the fourth and two more in the first part of next year..

Okay, perfect.

On then if anything additional you can share in terms of the extension of your gas contracts in Trinidad relative to the price which you are paying for gas and whether that does anything to increase these stability of your gas supply in Trinidad?.

Yes, we have signed a term sheet with the supplier and we are very close to finalizing at that contract it will be five year term, it will be a higher price but the price will still be very, very attractive when you compare to the cost curve in the industry and that will give a certainty for the next five years over the type of plans.

So I think we don’t have any announced today but I would say by the next call we would certainly believe that we will something to announce and we’re just really crossing the Ts and dot the eyes so we’re pretty happy with what the contract that we have for the Titan plan going forward..

Thank you, that’s my two..

I would just reiterate we have been in our results, we’re reflecting the higher gas price for Titan from the first of this year..

Thank you. The next question is from Brian MacArthur from UBS, please go ahead..

Hello, good morning John, I just want to go back to Medicine Hat for a minute that’s $100 million for the refurbishment, I thought the turnaround was in Q4, does that all go into this year or into next year somewhat because you talked a bit in the press release having 265 for Geismar then another 90 million this year which is partly for turnaround.

I’m just trying to figure out where that 100 million is actually getting spent, which quarters?.

For commercial reasons I’m not going to tell you when we’re going to refurbish it, but we’ve less demand in the summer in Medicine Hat then we do in the winter that might be a good, I don’t know if you want to be refurbishing your plant in 40 below weather so but I’m not going to exactly to tell you the dates.

I would take it safe to say that in the first quarter we’ve spent some money on the refurbishment of Medicine Hat i.e., equipment so I think that 90 million left to go is a good number for 2015 beyond the Geismar capital..

Okay, perfect.

And then, when you get that done there was some talk of one-time that you’ll get a little more than whatever was to 550 originally will that actually get you extra above 550 or will that just sort of get you said you didn’t put all the money in originally and sorry just get your operating back, right back more to that 100% level?.

I was talking with a guy that’s running that project in charge of our assets in North America yesterday, he has guaranteed me 1670 per day once we do all of this $100 million investment.

So you look at the current methanol price in that region I guess if everything runs at 365 over 600,000 tons of production we will get that $100 million back in about 8 months so I think it’s a good investment..

I think so, great thanks John, that’s my two questions..

Thank you. The next question is from Chris Shaw from Monness Crespi, please go ahead..

Yes, good morning or good afternoon. Can you give us any assessment of your customers sort of products in terms of what their profitability is right now.

I mean, some of these MTO, MTP, DME I mean like are they profitable right now you think they are comfortably profitable or some losing money of continuing to operate just kind of curious how -- I don't have a great idea particularly in Asia?.

Yes, it changes everyday depending on the relative prices, I would say the MTO guys ethylene prices are pretty good in Asia right now, propylene not as good. So if you are making all offense combination of propylene and ethylene you are doing really well I think the affordability for methanol and those applications today are over $400 a ton.

The DME and MTP the guys are making just propylene probably little marginal still maybe the ones that are running are cash positive, the ones that aren't, aren't and I would say it’s current methanol prices in the mid 300 based on the relative substitute is marginal but we still see good demand from both MTP and DME but we are seeing full rates on the MTO guys.

So again that will change tomorrow as the relative other products change pricing. So oil price, ethylene price, propylene price, propane price things we follow on a daily basis to look at these affordabilities..

So at least based on economic you wouldn't think that's scheduled you said the upcoming MTP and MTO plans would really there is no reason expect for I don't know problems with that the actual completion of building that you would think they would come on the stream when they are ready?.

We update that list in those timings on a regular basis depending on what we hear and see and that's our current view that doesn't mean that view couldn't change things in the marketplace but that's our current view..

And I’m just curious something like Geismar 1, how many years until you would actually have to take a turn around I just kind of – just out of curiosity?.

The normal turnaround cycle for our plants is three to four years depending on the technology. Some of the oxygen price is more – oxygen plants is about three years turn around, our traditional steamer farmers are four. .

Okay great. Thanks. .

And when I give you that capital number of 10 million per million tons of operating that includes the capital that we would plan to spend over that turnarounds cycle..

Thank you. The last question is from Steve Hansen from Raymond James. Please go ahead. Your line is open. Please go ahead..

Hey guys just a quick follow-up on tax rate given that it was a bit wonky in the quarter, any color on what you expect going forward here?.

Yes, I will ask Ian to answer that because I thought it was wonky as well..

Steve yes, it’s Ian I did too. We get into a lower earning environment like we have – we reported this quarter where we did kind of wonky tax rate so I don't think you read much into that.

So in terms of guidance going forward structural tax rates if you think about say $400 methanol price, think of 25 percentish little bit lower the price was a bit lower methanol price a bit lower. So 25 percentish structural tax rate and current deferred split think of 70% of tax rate would be current and 30% deferred..

Great. Very helpful. Thank you..

Thank you. There are no further questions at this time. Please go ahead Mr. Floren..

Well, thanks for all the interest and we believe that our results in Q1 reflects what we have described as the price drop for the methanol industry, improving global demand combined with limited new industry supply of contributed to higher spot most of the prices as we entered Q2.

Our sales volume have produced methanol as poised to increase due to the full impact of Geismar 1 production in Q2. We expect that our higher price environment and improved produce sales volume will result in higher EBITDA and earnings in Q2. Thank you for your ongoing interest in our company, have a great afternoon..

Thank you. The conference has now ended. Please disconnect your lines at this time. Thank you for your participation..