Methanex mothballs Waitara Valley methanol plant in NZ

Methanex Corporation, Vancouver, is to mothball its Waitara Valley methanol plant in the Taranaki region of the North Island of New Zealand.

The company says the decision has been made to close down the plant’s production because of its inability to secure sufficient gas supplies from the local fields offshore New Zealand.

It is understood that there has been a decline in production from OMV’s Pohokura field as well as delays in new development drilling caused by the COVID-19 pandemic.

Methanex New Zealand’s managing director Dean Richardson said the decision to mothball the plant was a disappointing outcome for New Zealand as the company expects methanol demand to rebound and grow as global economic activity recovers.

Mr Richardson said that production would continue at the company’s two production trains at the Motunui plant, also in Taranaki, however an organisational review has commenced in view of the lower production levels.

Methanex will place the Waitara Valley plant on a care and maintenance footing. Some activities will be retained, such as truck loading to supply the local market.

Mr Richardson added that the Waitara Valley facility will restart methanol production should gas become available.

Although this is not the first time the Waitara Valley plant has been mothballed, the current New Zealand government policy of not awarding any new offshore exploration licences in the country is expected to lead to further decline in gas supplies.

Mr Richardson said natural gas remains the cleanest viable feedstock to produce methanol on a commercial scale.

Source: Oil & Gas Journal