NZ opportunities drive growth for Canada's Methanex
BUSINESSDESK: Methanex, the world's largest producer of methanol, says projects in New Zealand and Louisiana are driving the company's near-term growth, as it works to reopen its 900,000-tonne-a-year Waitara Valley plant.
Methanex recently restarted the second methanol "train" at its Motonui plant after agreement with Todd Energy for a new 10-year gas supply contract.
It is capable of producing 650,000 tonnes of methanol annually.
However, the impact of that initiative has yet to show up in production figures, with New Zealand methanol production of 210,000 tonnes in the three months to June 30 roughly in line with previous quarters.
The company intends to decide before the end of this year whether to open its mothballed Waitara plant, which can prode 530,000 tonnes of methanol a year, and "de-bottlenecking" the Motonui plant for a total gain of 900,000 tonnes of additional annual production.
The company says demand for methanol is holding up, with "modest" planned additional global capacity relative to projected demand growth.
The Motonui and Waitara plants were built as part of the Think Big initiative of the Muldoon government in the early 1980s to exploit the global-scale Maui natural gas field. As Maui gas ran down, sections of the two plants were progressively closed, but recent gas discoveries have seen Methanex ramp back up its capacity in New Zealand.
Elsewhere, it is moving a mothballed plant in Chile to a site in Louisiana to add a further one million tonnes of capacity by late 2014.
The Vancouver-based company said in filings to the US Securities Exchange Commission that "despite some softness in certain derivatives in the current economic environment, overall methanol demand has remained good and pricing relatively stable".
"The methanol price will ultimately depend on the strength of the global economy, industry operating rate, global energy prices, new supply additions and the strength of global demand."