Port company collects exporter's $8m

By FIONA ROTHERHAM

Taranaki port company Westgate Transport gains more than $8 million from the settlement of a long-running dispute over unpaid wharfage fees.

After mediation, the port company and its major petrochemical customers have reached agreement on pricing arrangements for the next eight years.

As a result, a trial set down for next March in Auckland has been averted.

The $8 million in unpaid fees from methanol exporter Methanex has been sitting in a trust account pending the outcome of the mediation.

The mediation centred on the appropriate price to be paid by Methanex, Fletcher Challenge Energy, Shell Todd Oil Services and Coastal Tankers for the use of Westgate's tanker terminal. The row began six years ago, and in 1997 Methanex began underpaying Westgate in a bid to force the port company into giving it a special discount because of the high methanol volumes exported through the port.

Westgate began legal action against Methanex for breach of contract.

Methanex and the other three companies counter-claimed, seeking a declaratory judgment that the wharfage charge was not fair and reasonable due to Westgate's monopoly.

Westgate's wharfage charge since 1988 for energy-based bulk liquids has been $2.65 a cubic metre.

Details of the mediated settlement are confidential.

Methanex chief executive Bruce Aitken said the deal involved a lower cubic metre charge for all volumes, and the flexibility to vary the rate if future volumes rose or fell.

The agreement is backdated to the start of this year and Mr Aitken said it also involved "some compensation for history" beyond that.

Westgate had been continuing to pay its sole shareholder, the Taranaki Regional Council, a dividend based on net profit figures that included the disputed amounts.

Westgate chief executive Ron Snodgrass said the pricing difficulties centred on increased volumes in recent years combined with uncertainty as to future volumes.

The agreement secured "more financial certainty for the port over the coming eight-year period."

Meanwhile, Methanex said a final decision on proceeding with a planned syngas plant at Darwin in Australia would be made by the end of the year.

Mr Aitken said the $1 billion plant was not necessarily a replacement for the company's two Taranaki methanol plants.

Methanex had sufficient forward gas contracts to run the Motonui plants at capacity until 2005. A concern was that the rundown of the Maui gasfield would leave a shortage of gas to meet supply and therefore raise prices above what Methanex was prepared to pay.

Mr Aitken said the Darwin plant would be altered to include a higher methanol component if the Taranaki plants closed, but could otherwise stand as a viable syngas project in its own right.

Another contingency plan to replace the New Zealand operations is to build a methanol plant in Qatar in the Middle East.