Methanex is looking to refire the Waitara Valley methanol plant within the next 12 months, bringing its operations back to full capacity for the first time in a decade.
On a visit to New Zealand from Vancouver yesterday, Methanex Corporation chief executive Bruce Aitken told the Taranaki Daily News there was a "very high" probability Methanex would restart the Waitara Valley plant, which has sat idle since 2008.
A final decision would be made by the end of the year, he said.
"We spend hundreds of millions of dollars running these plants so we need to make a good decision," Aitken said.
He added he wanted Methanex's two Waitara methanol facilities operating at full capacity – which hasn't been seen since 2003.
"That's what they've done in the past and that's what we plan to do in the future."
If the Waitara Valley plant did begin production again methanol output would be about 500,000 tonnes annually and up to 50 jobs would be created, Aitken said.
Methanex employs about 160 people at its Motunui facility.
Reopening the Waitara Valley plant would also generate a great deal of contract work, he said.
"For every employee we have we tend to have at least a contractor or two as well."
Aitken said Methanex would also look into the prospect of producing methanol using coal-seam gas.
This comes on the back of Solid Energy's announcement it would begin coal-seam gas exploration in Taranaki.
"We'll take a look at the viability of it and if there's some way that we can participate that makes sense then we would be interested in doing that as well."
While Methanex had no experience in extracting coal-seam gas or turning coal-seam gas into methanol it was a viable option, he said.
Aitken was in Taranaki to coincide with the start-up of the Motunui No 1 train on July 1.
"It's a big, complicated project. We spent a lot of money.
"The team has done an unbelievably good job of putting together a very complex piece of work and delivering the projects on time and on budget."
Methanex has been operating Motunui No2 train since October 2008. It had sat idle since 2004 and cost $100m to restart.
Aitken said had he been asked six months ago, he wouldn't have rated the chances of Waitara Valley reopening so soon. But the availability of natural gas in Taranaki and the global methanol market had made it an attractive option, he said.
"Methanol prices continue to be quite strong and quite stable.
"The market looks very receptive to the new capacity we're adding here and our customers are looking forward to getting more methanol from New Zealand."
It was not known what the cost of restarting Waitara Valley would be. However, it would not be as much as that spent getting Motunui No1 train back into production, he said.
Waitara Valley still had a small operational presence and the infrastructure was still active.
"It's quite a different proposition to what the state of Motunui was."
From July 1 the two Motunui trains would produce a combined methanol output of 1.5 million tonnes annually.
By 2014 Methanex aimed to produce up to 2.4 million tonnes of methanol annually if Waitara Valley gets the green light.
Taranaki was a fantastic methanol supply location for Asia where a lot of demand growth was occurring, he said.
"The opportunity we've got to increase capacity here allows us to grow alongside our customers."
Since 2008 Methanex has spent hundreds of millions of dollars refurbishing Motunui, a lot of which stayed in the Taranaki economy, he said.
"It's a very thorough refurbishment and I think it's set this plant up to be a valuable long-term asset.
"These are really valuable assets to have which a lot of countries would love to have."
To build a new methanol plant would cost about US$1.5 billion ($1.9 billion), he said.
The Government built the plants in 1985 as part of the Think Big projects and Methanex bought them in 1989.
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