The Vancouver-headquartered company will spend about $75 million on restoring the plant, commissioned in the mid-1980s as one of the "Think Big" energy projects.
Gas will be sourced primarily from the Mangahewa field in North Taranaki, owned and operated by Todd Energy. But this field has yet to be fully developed. This would involve up to 25 new gas wells and a substantial expansion of Todd's processing plant.
Todd Corporation Group chief executive Jon Young said the contract with Methanex covered contingencies if sufficient gas could not be found but these arrangements were secret.
"We are optimistic that it will be commercialised and delivered to Methanex but should that prediction not be realised the specifics around that are commercially sensitive."
Young said the agreement, which is scheduled to see gas flowing in July, would have positive implications for the regional economy and the national interest.
"However, we recognise that there is still a lot of work to be completed on field appraisal and development to support this agreement."
He said studies conducted by Business and Economic Research Ltd (Berl) show that the investment Todd and Methanex were making would create hundreds of jobs.
"It is estimated that the projects and their combined capital expenditure of up to $860 million will make a significant contribution to New Zealand's GDP over a 10-year period.
"The Government would benefit by $1.2 billion," Young said.
Todd is now discussing the project with landowners, hapu, local government bodies and other community groups.
Economic Development Minister Steven Joyce said the announcement was a positive start for a year which was forecast to be challenging for the world economy. "This is a good example of why oil and gas development with suitable environmental protections forms part of our plan to build a stronger economy."
Petroleum Exploration and Production Association chief executive David Robinson said the cash injection would make a "real difference" to the Taranaki economy.
"Good news like this doesn't come every day," he said.
Opposition to oil and gas exploration has become more vociferous over the past two years but Robinson said Todd had an "excellent track record for their safety and environmental performance and I have no doubt this will continue with their expanded operations."
HOT FUEL
* Demand from Asia has overtaken that from the West, accounting for an estimated 67 per cent of global methanol markets
* Methanol is used to produce formaldehyde, acetic acid and a variety of other chemical intermediates. It is also used as an additive in petrol and is used in fuel cell applications
