Methanex ponders mothballing plants

Methanex is considering closing its three Taranaki methanol plants next year with the loss of all 220 jobs because of a lack of gas supply.

Vancouver-based Methanex is operating only one of its Taranaki plants after a substantial reduction in its entitlement to Maui gas this year, but wants to preserve its capacity in New Zealand in the event of a big gas discovery.

The company said yesterday it was considering closing the plants temporarily but there was no guarantee they would reopen.

The vice-president for Methanex's Asia-Pacific operations, Bruce Aitken, said it was an unsettling time for staff because the company could not provide them with any certainty.

"What we do do for our staff is communicate with them regularly and openly so they know as much about what's going on in the New Zealand gas market as I do," Aitken told Radio New Zealand.

"There aren't a lot of other jobs in the petrochemical industry where people can walk into an equivalent job in another company. It will require people to either move from the area or look for jobs in different industries."

Methanex needs about 20 petajoules of gas a year to run the Waitara Valley plant at full capacity and about 33PJ of gas for each of the two plants at Motunui.

Most of New Zealand's gas is supplied by the Maui field but its reserves will be depleted by 2007.

However, the company estimates there is an additional 200PJ of gas in Maui beyond the 370PJ determined by an independent expert. "Methanex adds a lot of economic value to New Zealand in addition to our direct employees," Aitken said.

"There are 650 full-time equivalent jobs that our economic activity creates within New Zealand. We're the sixth-largest exporter in the country, we generate something like $600 million worth of export revenue per annum."

The dominance of Maui had deterred exploration in the area, and meant it would be difficult to replace a field that provided 80 per cent of supplies.

"What we should be doing right now is attracting more explorers to come and drill more wells in the Taranaki area," Aitken said.

"The success rate has actually been very good over the last few years, but unfortunately there aren't enough wells being drilled."

The company would be reluctant to pull out of New Zealand entirely, where it has had a presence for 20 years.

"It's been a very successful period for us. Some of the most efficient plants we own in the world are New Zealand plants.

"We have a well-trained, highly motivated, great bunch of people working for us, so the last thing we want to do is pack up and go somewhere else.

"The short answer is if we've got no gas we have to go, we have no choice."

Reserves at the next viable gas field, Pohokura, are smaller and it is unlikely to be in substantial production until late 2006.

- NZPA