Methanex drops bid for injunction

By CHRIS DANIELS

Methanex has dropped its attempt to halt the reallocation of diminishing Maui gas reserves.

The Canadian-owned methanol maker was trying to get the High Court at Wellington to stop a redetermination process, which is designed to work out future supplies of gas from the field.

The move was triggered when latest seismic research showed Maui, which has supplied New Zealand with some of the cheapest gas in the world for the past 20 years, may run out two years sooner than expected, in 2007.

Although there will be plenty of gas left for home, business and commercial customers, the three huge gas users will have to scrabble for more expensive supplies.

The redetermination process involves Methanex, NGC and Contact working out supplies from the field's owners, Shell Group and Todd.

Methanex said it had not been given enough information about the field, so it applied for an interim injunction to stop the whole process.

Methanex NZ managing director Bruce Aitken said this application had now been dropped, although he would not say why. A substantive court hearing on obligations to provide proper information would still go ahead in August.

The redetermination process would go ahead in the meantime.

NGC issued a statement saying it welcomed Methanex's decision not to proceed with the application for an injunction.

Electricity generator and retailer Contact Energy has joined NGC in opposing the Methanex court action, saying that it too has enough information about the Maui field to proceed with the reallocation.

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 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. Methanex, NGC and Contact buy their gas from the Crown.