Reuters New Zealand
Methanex to reopen New Zealand methanol plant
Tuesday May 13, 12:29 PM
WELLINGTON, May 13 (Reuters) - Methanex Corp MX.TO, the world's biggest methanol producer, said on Tuesday it would reopen one of its New Zealand plants after securing more supplies of natural gas.
The Vancouver-based producer said it would spend NZ$70 million ($54 million) to restart a unit at its Motunui plant producing 900,000 tonnes from August until at least the end of 2009.
The company said gaining extra gas supplies and high energy prices justified the reopening of the plant, which was shut down in 2004.
"The high energy price environment has led to continuing strong demand for methanol and upward pressure on methanol prices and the industry cost structure, which has allowed our assets in New Zealand to be competitive," said local managing director Harvey Weake.
The company has a 500,000 tonne methanol plant at nearby Waitara. Both plants are in Taranaki, on the west coast of the North Island, where New Zealand's commercial oil, gas and petrochemical industry is based.
"With the re-opening of our Motunui plant, we will have 1.4 million tonnes of flexible capacity, which we will be able to utilise in the future dependent on market conditions and our ability to secure additional economically priced natural gas," Weake said.
Last week Methanex hiked its quarterly dividend by 11 percent, announced a share buyback and predicted a rosy future for the methanol industry.
It also announced it had signed a tentative deal with Chile's state energy company to spend $100 million to expand natural gas development in the south of that country. ($1=NZ$1.30) (Reporting by Gyles Beckford)
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