Methanex signs NZ supply agreements for gas supply to 2029

Wednesday 18th July 2018

Methanex New Zealand, the country's biggest gas user, says it has signed supply agreements for more than half its annual production for the next 11 years.

The Vancouver-listed company, whose plants on the northern Taranaki coast use about 40 percent of all natural gas produced in this country to manufacture methanol, said the agreements will combine with contracts from other natural gas producers to supply its New Zealand facilities. Its annual production capacity is 2.4 million tonnes.

"We are very pleased to announce the signing of these significant gas contracts in New Zealand," John Floren, president and chief executive of Methanex, said in a statement. "Our New Zealand facilities are ideally located to supply the growing Asia Pacific market and these agreements provide a long-term gas supply to underpin a significant portion of our operations."

Dean Richardson, managing director of Methanex New Zealand, said the agreements "provide confidence" in the company's Taranaki operations to 2029, though said "we continue to be disappointed over the government’s surprise halting of off‐shore oil and gas exploration and if this policy remains in place it will eventually have a negative effect on our business and New Zealand’s economy."

In April, the government announced it would not issue new offshore oil and gas exploration permits, though existing permits will continue. Methanex's fields use gas piped ashore from offshore Taranaki gas fields, and official estimates suggest New Zealand has only another 10-to-11 years of known gas reserves, although exploration and mining permits already issued and unaffected by the ban run through, in some cases, to the mid-2040s.

At the time, Methanex said it was "disappointed over the government’s decision to end offshore block offers and the lack of consultation with industry that has gone into making this decision".

(BusinessDesk)

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