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Methanex settles new gas contracts
20 August 2010 - Enough natural gas has been purchased recently by Methanex to keep its 900,000 tonne capacity methanol plant at Motunui operating until the end of 2011.
Sources: Methanex and Lindsay Clark
Vancouver-based methanol producer Methanex Corporation said gas contracts with a number of gas suppliers from Taranaki had been finalised in the June quarter which also provided options for further natural gas supplies in 2012.
As the world’s largest methanol producer, Methanex said it estimated global demand for the chemical feedstock has surpassed pre-recession levels and had now reached all-time high levels.
Bruce Aitken, president and chief executive, said world methanol industry conditions remain healthy. While new capacity has started up in the June quarter, some higher cost capacity has also been shut in. The result has been increased balance in the world methanol market and relatively stable prices.
Methanex states it still has the potential in New Zealand to increase production of methanol capacity by 1.4 million tonnes a year by starting up the second 900,000 tonne methanol train at the Motunui plant and the 500,000 tonne Waitara Valley plant. Any such increase in New Zealand production would depend on methanol supply and demand dynamics and availability of economically priced natural gas.
Methanex has funded approximately US$9.5 million to New Zealand exploration company Kea Exploration during the June quarter to drill the Beluga-1 well near the company’s methanol plants, in return for rights to the gas at a price competitive to the company’s other locations in Trinidad, Chile and Egypt.
They are reviewing the Beluga-1 data and are in discussions with Kea about further exploration. Though the initial Beluga well was not commercially viable, early results indicate that gas may be accessible from a sidetrack well.
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