In its fourth quarterly report for 2007, issued late last week, the Vancouver-headquartered corporation says it has sufficient contracted gas to allow its sole remaining New Zealand manufacturing operation – the 530,000 tonne Waitara Valley plant – to continue production until at least mid-2008.
"We are currently in discussions to secure natural gas to extend production from this facility or possibly commence operations at one of our larger 900,000 tonne per year facilities at our Motunui location,” the report added.
Methanex says the future of its New Zealand operations continues to depend on world methanol supply and demand, and the ability to secure gas on “commercially acceptable terms”.
Methanex mothballed the 1.8 million tonne twin-train Motunui complex in December 2004, citing a lack of low-priced Maui gas as the main reason for the closure. But since that time world demand for methanol has risen and prices have firmed, allowing Methanex to run its valley plant economically while paying market prices for gas.
The latest Methanex report says its average methanol price for the fourth 2007 quarter was $US514 ($A578) per tonne – much higher than the $US270 ($A304 million) per tonne earned in the third quarter.
Meanwhile, Methanex is experiencing major difficulties accessing gas from Argentina to fuel its 3.8Mt, four-train methanol manufacturing facilities in Chile.
When the facilities are operating at capacity, about 60% of the gas comes from Argentina. But supply and export duty problems have halted the supply of Argentine gas since last June, according to Methanex.
This meant the Chilean facilities produced only 1.84Mt of methanol last year, compared with 3.18Mt of 2006 and the nameplate capacity of 3.8Mt.
"We cannot provide assurance as to when and to what extent our natural gas supply from Argentina will be restored," Methanex said.
This Thursday, the New Plymouth District Council is due to hear applications from Methanex for land use resource consents allowing the Motunui plant’s re-commissioning and continued operation.
Methanex has also filed further water use and emissions consent applications with the Taranaki Regional Council, and these have granted without objections.
Last year Methanex studied the economics of restarting one train at Motunui and found that feasible.
According to the Taranaki Daily News, Methanex has already begun sounding out the Taranaki engineering industry over workforce availability for a re-commissioning project, anticipated to cost between $NZ60 million ($A52 million) and $NZ100 million ($A87 million).
But industry sources wonder if there is enough spare gas in Taranaki to fuel both the valley plant, which can use up to 20 petajoules per annum, and one train at Motunui, which would use up to 35PJ a year.
