Methanex sweats on Maui gas report

By CHRIS DANIELS

The future of methanol maker Methanex is uncertain as customers of the ageing Maui gas field await news this month about their contracts.

United States gas consultancy Netherland, Sewell & Associates has been called in to reach an independent, binding conclusion on how much gas is left in the field, which is now expected to run dry in 2007, two years ahead of schedule. Its report, which is likely to disadvantage Methanex, is due soon.

Maui produces about 85 per cent of New Zealand's natural gas. About 40 per cent of this is used to fire electricity-producing power stations, another 40 per cent to make methanol and the rest for commercial, industrial and household reticulation.

The Crown sells Maui gas to Methanex, the local subsidiary of a Canadian company, Contact Energy and NGC.

Methanex exports methanol worth around $800 million a year and employs 220 people in Taranaki. It has existing contracts with the Crown, meaning any reduction in the amount of gas it is allowed to buy will have an immediate impact.