Ah, says The Slug, in Australia methanol is different – or should it be said different in that it is “conspicuous by its absence”.

In a country which has enormous reserves of natural gas, methanol ought to be a bit of a speciality. For a variety of reasons, some historic, but others which have more to be with high capital costs, methanol and other liquids made from gas have never taken off.

The question hanging from the latest rise in the methanol price is whether a sea change is underway, and whether feedstock supply, and security of supply, are issues which could see a revival of the great GTL (gas-to-liquids) stampede which came (and went) in the 1990s leaving very little trace of anything actually having happened.

Readers, even those with short memories, should still have the names of Syntroleum, GTL Resources and Methanex stored somewhere in their grey cells. These were three of the companies which were going to revolutionise the North West Shelf by spending a couple of billion dollars between them to produce a variety of exotic liquids.

A common complaint was that profit margins in Australia were too thin after allowing for high construction costs. The gas also was cheaper in places like the Middle East.

Last week, however, there was a whiff of methanol drifting back across the North West Shelf. The first waft came when The Slug noted from trade reports that the world methanol price had risen to around $US320 a tonne, a 25% rise in less than six months.

The second puff of methanol came when EnergyReview.net reported that Methanex was re-stoking the fires under its mothballed New Zealand plant to catch the wave of higher world prices.

The plans for the Waitara Valley plant are interesting, but limited, with the plant probably only operating for a few months – which is all that it can because of the acute gas shortage in NZ.

Australia is different. It has the gas, but limited methanol capacity, and nothing which fits the description of a world-class plant – a situation which was supposed to have been fixed in the rush to develop GTL projects based on vast gas deposits.

The Slug may be reading too much into the short-term plans of Methanex but it seems to this casual observer that factors are conspiring to create conditions for a return of the GTL birds. Consider a few:

there is the methanol price itself, perhaps a short-term flurry, but interesting.

there is the big security scare sent through all gas users in the wake of Russia’s fun-and-games with gas supply to the Ukraine. What happened there could happen in virtually any third-world country.

there is the rush to stitch up Australian gas reserves for LNG exports to Asia and, possibly, the US.

It is the combination of short and long-term issues which has The Slug dusting off his crystal ball and wondering whether the GTL firms, like Methanex, are starting to think they quit Australia too soon, and that the higher prices are washing away some of the capital cost considerations – and that unless they move now to secure future gas supply in a stable country they will be permanently cut out of the game by the LNG producers.

Far-fetched? Perhaps, but there is no denying that when you factor $US60 a barrel oil through a spreadsheet, and then look at long-term, stable, gas supplies, Australia starts to give off that attractive, methanol-based glow, again.