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Elevate Magazine
August 14, 2024

Methanex Temporarily Shuts Plant Until October

methanex

Photo courtesy: Methanex NZ, Facebook

Methanex, New Zealand’s largest gas user, has announced the temporary shutdown of its methanol plants in Taranaki until the end of October 2024. The decision follows an agreement to sell the gas to Contact Energy and Genesis Energy.

Rich Sumner, the chief executive officer of Methanex, stated that the agreement would help secure electricity supplies amid the current low levels of gas reserves and hydroelectric water

“We have been working closely with energy providers, other gas users, and the government of New Zealand on how we can be part of the solution. We believe these agreements will play an important role to support the energy sector.”

Contact Energy CEO Mike Fuge has justified the company’s recent agreement with Methanex. 

“With national hydro storage levels at just 46% of the average for this time of year and an ongoing decline in domestic gas production, we have taken this step to support the security of electricity supply to New Zealanders,” said Fuge. 

Gas contributes approximately 10% to electricity generation; however, supply has been constrained due to lower-than-anticipated reserves and technical issues in certain fields.

Genesis Energy said the additional gas supply would allow it to fully manage the biggest unit at the Huntly station and support electricity generation through the remainder of winter and into spring. 

Methanex plans to supply gas to power companies over the next three months and anticipates that this arrangement will generate more revenue than the income lost from methanol production. 

“These commercial arrangements are expected to positively impact Methanex’s Q3 and Q4 2024 earnings, with after-tax proceeds expected to meaningfully exceed the margin lost on New Zealand methanol production delivered to customers,” the company said in a statement.