NZ operations are safe: Methanex

By PAULA OLIVER and REUTERS

Major Taranaki employer Methanex New Zealand says its plan to build a new $1.9 billion methanol plant in Australia will not threaten its two local plants.

Instead, the company said it wanted to operate plants in Australia and New Zealand to meet growing demand from Asia.

Methanex NZ, owned by Canadian-based parent Methanex Corp, has two Taranaki plants - in Motunui and Waitara Valley. Together they employ about 250 people, and contribute $40 million a year to the economy.

Methanex Corp said this week that it risked losing market position in Asia if a new plant, likely to be located in Darwin, did not begin production by a 2005 deadline.

It said it was shifting its production to areas where it could lock in long-term gas contracts to supply its plants.

The statement reopened old concerns that Methanex could shift its operations overseas. But local managing director Bruce Aitken told the Business Herald yesterday that this was not the case.

"Certainly, we have every intention of continuing to run our plants," Mr Aitken said.

"We have gas in New Zealand through to about 2005 at the moment, so extending life beyond that is dependent on the development time for Pohokura and our discussions with the joint venture."

Doubt has been cast over the future of the local plants already this year, when Fletcher Energy was put up for sale. Taranaki business groups were worried that new owner Royal Dutch Shell would force Methanex's operations to Australia if it did not agree to develop the Pohokura gas field. Shell is involved in developing a major project off the Northern Territory.

But Shell moved quickly to quash the concerns. Now Shell and its Pohokura partners, Todd Energy and German firm Preussag Energie, are in talks with Methanex to secure a long-term contract.

Mr Aitken said the discussions were proceeding slowly.

Methanol, a clear liquid developed from natural gas, is used in products like plastics and sealants. Methanex's sales last year represented about a quarter of total world demand.