8791 - Jose Methanol Expansion

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Environmental & Social Review Summary

Project Number

8791

Company Name

Metanol de Oriente Metor S.A.

Date ESRS Disclosed

Aug 29, 2006

Country

Venezuela, Republica Bolivariana de

Region

Latin America and the Caribbean

Last Updated Date

Sep 25, 2022

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 21, 2006
Signed : Dec 22, 2006
Invested : Jan 24, 2008

Sector

Petrochemical

Industry

Manufacturing

Department

Regional Industry MAS LAC & EUR

Project Description

Metanol de Oriente S.A. (Metor), a Venezuelan company established in 1992, is a leading Latin American producer of methanol with a nameplate capacity of about 750,000 metric tons per year (mtpa). The company exports about 80% of its output to the U.S. and Europe.

Metor, an existing IFC client since 1993, has requested an IFC A loan of up to $50 million to help finance the expansion of its existing plant, located at the Jose Industrial Complex in the State of Anzoategui, which would increase its production capacity up to about 1.6 million mtpa. The feedstock for the project would be provided by Petroleos de Venezuela S.A. (PDVSA), the Venezuelan state energy company. The project’s output would be sold through off-take contracts. Total project cost is estimated at $525 million. The project is expected to be completed in early 2009.

Overview of IFC's Scope of Review

The review of this project consisted of appraising technical, environmental, health, safety and social information submitted by the project sponsor, including the full Environmental and Social Impact Assessment (ESIA), and a field visit to Metanol de Oriente (Metor) project site. The environmental and social (E&S) appraisal team visited the existing production areas, proposed expansion area, and the environs of Jose Industrial Complex (JIC). The E&S team also held meeting with the ESIA consultant, Metor managements, and JIC management.

E & S Project Categorization and Applicable Standard

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The project involves construction and operation of a new methanol production line in Metor’s existing plant. The Metor plant is located inside an existing massive industrial complex. The industrial complex is within a 30-km2 industry protection zone that was established in 1996. The closest community is approximately 10 km away. Metor has proposed feasible technologies and corrective actions to mitigate potential environmental, health, and safety (EHS) and social impacts.

Environmental and Social Mitigation Measures

Metor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by Metor is summarized in the paragraphs that follow. Further information is provided in the attached Environmental and Social Action Plan (ESAP), which is agreed upon by IFC and Metor and will address the compliance gaps with IFC’s requirements.

- Land and natural environment:

Metor’s operation site encompasses approximately six hectares inside the JIC, which is located along the Caribbean Sea and is approximately 15 km east of Barcelona, Venezuela. In 1996, Venezuela government set up an industrial protection zone for JIC and its potential future expansion. The protection zone consists of approximately 30 km2 land and 30 km2 coastal ocean areas. No development is allowed in this protection zone except the expansion of the JIC. The nearest community to the Metor site is Puerto Piritu, which is approximately 10 km west. There are no protected areas or protected species at or near the site.

- Environmental and Social Assessment:

Metor contracted an independent consulting firm to conduct an environmental and social impact assessment (ESIA) in 2006 according to IFC’s requirements. The ESIA concludes that the environmental and social impacts for the Metor expansion are limited. However, it shows that there are elevated noise levels at the existing site. Employees are required to wear ear muffles or other hearing protection equipment in the areas with elevated noise level. The design criteria for the noise levels of the proposed new operations meet both local regulatory requirement and IFC’s guideline limit. The ESIA meets IFC’s requirements, and Metor management agrees to implement the mitigation methods proposed in the ESIA.

- Environmental, health, and safety (EHS) management:

The Integrity Protection Department is charged with leading the environmental, occupational health, safety, fire prevention, and security programs with the supports of the technical departments. Metor has engaged external consultants to improve its EHS management works. In accordance with the ESAP, Metor will establish and implement an effective EHS management system. .

- Labor issues:

Metor has a Human Resources (HR) Department that has established human resource procedures and an HR policy for approximately 150 employees. There is one active union in Metor called Sindicator Unicode Trabajadores de Metor that represents about half of the employees. The union representative and Metor management interface on a regular basis. According to Metor management, there has not been any union unrest and there are no outstanding union issues. The HR department has one labor expert to address employee grievances for both union and non-union employees. Metor will hire approximately 30 more employees for its expansion. Metor will try to recruit more female employees to increase the percentage of female employees during the expansion as stated in the ESAP.

- Occupational health and safety (OHS):

OHS issues in Metor are also handled by the Integrity Protection Department, and included in the existing Annual Integral Protection Plan. In accordance with the ESAP, Metor will also include OHS management into the EHS management system. Metor has OHS procedures that address protections of employees for various operation processes. All the employees wear proper personal protection equipment and attend routine OHS training. There is no fatality at Metor since 1995 and the incidence rate meets the good international practice. Noise levels are elevated across the plant site, which come from both the Metor equipment and from equipment of nearby plants. Metor will take measures to abate the noise sources for the existing operations. As required in the ESAP, Metor will revise its noise and air quality monitoring program to meet IFC’s requirements.

- Community health and safety:

The Metor project is self contained within the JIC and does not transport raw materials or finished project through communities, with the exception that 3% of the methanol product is distributed locally by certified trucking companies, following Metor’s handling and emergency procedures. There are no incidents or claims for the road transportation of methanol. There will also be no direct impacts to the communities during the construction phase. In the worst case scenario of explosion or fire at the Metor facility it is expected that the closest community would not be impacted.

- Raw materials and resource consumption:

Natural gas is the major raw material and fuel for methanol production. JIC supplies the natural gas to Metor through an existing gas pipeline. There is no need for new pipeline for the expansion. Metor consumes approximately 11,000 m3 per day water at the present stage, while it will consume 19,000 m3/d after the expansion. Water is provided by the JIC and it is not anticipated that there will be a problem in supplying the additional water. Metor consumes approximately 127 MWhr per day electricity at the present stage, while it will consume 283 MWhr/d after the expansion. The power source is from the grid, which comes predominately from the hydropower plant in southern Venezuela. Metor will research opportunities to reduce energy and water consumption.

- Environmental compliance:

Metor generates 1,800 m3/d wastewater at the present stage and will generate 4,000 m3/d wastewater after the expansion. There is an onsite wastewater treatment plant, and Metor will build a new wastewater treatment plant for the expansion project. The wastewater effluents for the exiting wastewater treatment plant meet all the local regulatory requirements and the World Bank/IFC guideline limits. The ESIA predicts the wastewater effluents from the new treatment plant will also meet the local regulatory requirements and the World Bank/IFC guideline limits. Air emissions from the exiting operations and predicted air emissions from the expansion project meet all the local regulatory requirements and the World Bank/IFC guideline limits. As required in the ESAP, Metor will revise its monitoring program and conduct routine ambient air quality and ambient noise level monitoring.

- Solid and hazardous wastes:

The major solid wastes generated onsite are packing materials and sanitary/office wastes, which are collected by contractors for disposal. Waste petroleum products and spent catalysts are sold to licensed recyclers for reuse and regeneration.

- Hazardous materials and operational hazards:

There are currently three methanol storage tanks onsite with one additional planned as part of the expansion. There are several other small hazardous material storage tanks onsite, such as diesel and acid. The tank farm and related equipment/operations meet good international industry practice. The majority of the manufactured methanol is loaded on to tankers for export via JIC’s jetty. Metor has updated a hazard operability study (HAZOP) for the existing operation and has conducted a qualitative HAZOP for the expansion project. In accordance with the ESAP, Metor will conduct a quantitative HAZOP for the expansion project during the detailed design/construction phase, and conduct a safety audit by an independent consultant to improve operation safety. Metor will also prepare a construction safety management plan for the expansion to ensure safety for both the construction project and the normal operations.

- Fire prevention and emergency response:

JIC is able to respond to any emergencies within the JIC complex as it has its own fire equipment, which is routinely maintained, and a trained fire brigade. The Metor facility conducts routine drills for fire fighting and potential chemical releases. Metor also conducts joint emergency response drills with neighboring chemical companies within the JIC. There is an onsite clinic in JIC for first aid, routine physical checks, and emergency response.

- Green house gases (GHG):

Metor purchases power from Edelca-Guri hydropower plant; therefore, there is no indirect generation of GHG. Metor generates approximately 400,000 ton/y carbon dioxide (CO2) from the reformers and boilers at present stage, while it will generate 800,000 ton/y CO2 after the expansion. CO2 is also the raw materials for methanol manufacturing. Metor will consider the feasibility of recycling CO2 from its own emissions.

Stakeholder Engagement

The Metor site is located inside the JIC and the industry protection zone. The closest community is approximate 10 km away and is not affected by the project. Metor provides philanthropic donations, with approximately values of $300,000 each year, to schools, hospitals, and disadvantaged communities in nearby cities but does not consult or engage communities directly about their operations.

Client Documentation

File Name	Actions
METOR EsIASC Expansion Project Executive Summary.pdf
ESAP _Final_ - Metor II.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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Environmental & Social Review Summary

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Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

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