Methanex New Zealand spokesperson Gerry Kennedy today confirmed the board of the Vancouver-headquartered corporation had last week given interim approval for a revised, smaller scale plant to be built on the Burrup Peninsula, Western Australia, and producing methanol from late 2005.
However, she cautioned against too much elation, saying final project approval was not anticipated until late next month.
"This was conditional approval only and depends on the successful resolution of all outstanding issues, including the finalisation of the key infrastructure agreement, the confirmation of the Federal Government support package and the awarding of the main contract for engineering, procurement, construction and management," she told Energyreview.Net.
She said some Methanex staff from several sites around the world, including New Zealand, had already been working closely with the Melbourne and Houston offices of Aker Kvaerner for the past few months on preliminary engineering studies.
But it would be premature to talk of greatly increased numbers going to the five-strong Perth office of Methanex or to the Houston and Australian offices of Aker Kvaerner.
Also Ms Kennedy said the materials demonstration unit (MDU) within the Methanex Motunui complex was working well, though a final decision had still to be reached on whether that technology would be used at Burrup.
Two years ago Methanex and Synetix, a division of UK-based ICI, built the $US7.5 million MDU pilot plant, which Methanex Asia-Pacific boss Bruce Aitken said could revolutionise future syngas plants around the world, producing more synthesis gas from the same amount of natural gas than traditional methods and at a lower capital cost.
Next month's expected final seal of approval for the revised smaller Methanex project will mark an almost remarkable turnaround for Burrup's fortunes after Methanex and Syntroleum Corporation pulled the plug on proposed projects earlier this year.
While Syntroleum walked away from its $A1 billion Sweetwater gas-to-liquids proposal because it could not raise the money, Methanex managed to renegotiate its gas supply agreement with Woodside Petroleum for a smaller-scale development of 1.3 million tonnes per annum instead of the original 2.0 million tonne project.
Construction of the Methanex plant could almost be in tandem with work on the giant $A630 million Burrup Fertilisers Ammonia, which has a mid-2005 completion target for its $A630 million, 760,000-tonne ammonia plant.
When Methanex first announced its Burrup plans, to ensure it can satisfy growing methanol demand in the Asia-Pacific region, some New Zealand industry analysts said it would be another nail in the coffin of its three Taranaki plants - only one of which is presently producing.
However, these same people are now more optimistic. "It's certainly not the death knell for New Zealand.
"The construction of the Burrup plant will not necessarily mean the closure of all Taranaki plants as Bruce Aitken is on record as saying he wants to keep New Zealand as a swing producer," said one analyst, who did not wished to be named.
He said this would be particularly true with the smaller Burrup facility, as Methanex supplied over 2.4 million tonnes a year into Asia-Pacific so it would have to source over one million tonnes of product from elsewhere.
It would make economic sense for New Zealand to supply all or the majority of any supply shortfall, if only Methanex can sign the necessary gas contracts.
