Yesterday EnergyReview.Net reported newly-appointed Methanex NZ managing director Harvey Weake as saying the government had been too slow assessing the possible huge implications of the wind-down of the Maui field. "I am suggesting we do whatever it takes to make it happen, convincing the government of the urgency of the situation," he said.

However, last night Hodgson told ERN that he was saddened by Weake's comments.

"The truth is that Methanex was a creature of Maui. The harsh reality is that methanol manufacturing is not a high value use of natural gas . . . and if there is no gas available at a price Methanex can afford to pay then it will relocate."

Hodgson said he was miffed why an oil exploration company would go around looking for lots of pockets of gas, only to find low-value uses available in New Zealand. "Of course people go looking for gas, but unless large quantities become available, low value uses such as methanol production will simply not be viable."

Hodgson admitted, however, that there would be some negatives if Methanex left New Zealand - the loss of a major export earner and the loss of jobs and expertise in Taranaki.

Last year a BERL study estimated the impact, direct and indirect, of the Methanex presence in Taranaki to be over $NZ1 billion in gross turnover, $NZ375 million in gross domestic product, and the employment of about 650 workers.

Hodgson also rejected Weake's call for a lowering of royalty rates for gas to spur more exploration for those desperately needed new reserves.

Overall New Zealand's petroleum regime was very well regarded by such experts as IHS Energy and was one of the best in Asia-Pacific, the minister said,

Weake yesterday said his first priority was to secure enough gas for 2004 to keep at least one of three methanol trains operating and that he would be doing all he could to ensure a sustainable New Zealand gas industry - "and that's going to take quite some effort."