Methanex recently pulled the pin on a 2 million tonnes per year methanol plant to be built close to the North West Shelf gas project after the Australian dollar surged past 59 cents ruining the project's economics.
However, Woodside has revised its original gas supply deal for 200 terajoules of gas a day for 25 years with an agreement to supply 100 terajoules a day for 20 years.
The deal is conditional on Methanex and North West Shelf board approval and plant costs meeting Methanex's requirements by September 30.
A smaller plant is one of the options Methanex is considering to replace the original plans for a $2 billion plant, which would have been the world's largest. The original supply deal also would have made the project one of the state's biggest gas users.
