Methanol train to keep running: Methanex

Methanex is confident New Zealand's improved gas supply situation, high world oil prices and strong global demand for methanol would allow it to run its Taranaki plants into the next decade, according to New Zealand managing director Harvey Weake.
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Yesterday afternoon Weake said sustained oil prices, of $US100 per barrel and over, were encouraging the blending of methanol with ordinary petrol and diesel, and with various biofuels.

There was also increasing usage of methanol derivatives, such as petrol octane enhancer MTBE and glycerine, in ordinary fuels blends and with biofuels.

This had led to an expansion of the world methanol market in recent years, from about 40 million tonnes per annum to close to 50MMtpa.

"There is a tremendous robustness in the world methanol market, with methanol used in over 60 chemical derivatives," Weake said.

He said Methanex had mothballed the 1.8MMt twin train Motunui complex in Taranaki in December 2004 due to the lack of gas in New Zealand, particularly the relatively cheap "367" Maui gas.

However, Methanex was now "far more comfortable with gas supplies" and the present strong methanol prices, of about $US450 ($A475) per tonne in the Asia-Pacific region, meant Methanex was able to pay more for its gas and still run its New Zealand plants profitably.

Methanex yesterday confirmed the August restart of one methanol train at Motunui at a cost of about $NZ70 million (about $A57 million) and plans to run the plant until at least the end of 2009.

Weake said he was also confident Methanex would be able to run either one Motunui train or its smaller Waitara Valley plant for several more years, but not both unless there was a significant new gas discovery somewhere in the Taranaki Basin.

The Motunui unit will use up to 35 petajoules of gas a year to produce about 900,000 tonnes of methanol, while Waitara can use about 20PJ to produce up to 535,000t of methanol.

"Based on the great progress of the New Zealand gas industry in the past three years, I have great confidence they will get out there and explore for more gas. We are giving a strong signal to them that there is a market for gas," he said.

Weake told that Methanex would consider conventional and non-conventional gas as feedstock.

That included parcels of gas from such onshore Taranaki fields as Greymouth Petroleum's Turangi and Kowhai finds or even coal seam methane from Solid Energy's project in Waikato.

"If we can cobble together enough gas, getting some from here and supplementing that with other gas, then we will be able to keep our Taranaki facilities operating for perhaps quite a while yet," Weake told PNN.

However, Methanex would only consider new gas found near existing infrastructure as the cost of constructing additional pipelines would preclude any Greenfield developments, he concluded.

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