Contact joins NGC in Methanex fight

By CHRIS DANIELS energy writer

Contact Energy has joined NGC in opposing court action launched by methanol maker Methanex, which wants to halt a reallocation process for the dwindling Maui gas field.

The mighty Maui field is now predicted to run out sooner than expected - 2007 rather than 2009.

While gas supplies to the home and business market are assured well into the future, the big users are now trying to agree on how best to use the last of Maui, which has provided some of the world's cheapest natural gas for more than 20 years.

Methanex has taken court action to halt a redetermination process that is under way, saying it has not been given enough information about the true size of the field.

Contact yesterday announced it was joining forces with NGC to oppose the court action, which goes to the High Court in Wellington next week.

"Contact Energy has concluded that it is prudent and in the company's interests also to join as a party to the action," chief executive Steve Barrett said yesterday.

"Contact opposes Methanex's application to delay the redetermination process."

The different requirements of the big gas users have been looming as a potential source of conflict in the process.

Methanex, which uses more than 40 per cent of all gas produced from the field, wants as much gas as possible as soon as it can get it, to keep its Taranaki methanol plant running at peak capacity.

NGC and Contact, however, want guaranteed supplies of gas well into the future, most importantly to fire power stations, but also to supply their commercial and industrial gas customers.

The Maui field is 87.5 per cent owned by Shell Group and 12.5 per cent by Todd Petroleum. They sell the gas to the Crown, under contracts signed back in the 1970s. The customers, Methanex, NGC and Contact, buy their gas supplies from the Crown.