Boom times are back for Taranaki's multimillion-dollar methanol industry, with production set to reach record levels.
Methanex New Zealand confirmed yesterday that on Saturday it restarted its Waitara Valley methanol plant, which has been idle since 2005 when it was shut down because of a lack of natural gas.
But now there's plenty of available gas, thanks to new drilling techniques, including fracking, which have resulted in significant discoveries both on and offshore in Taranaki.
This has in turn resulted in Methanex signing new long-term gas supply agreements, allowing it to spend more than $240 million on a number of capital projects.
Last month Methanex also successfully restarted an idle methanol distillation unit, which will "debottleneck" production capacity from both Waitara Valley and the nearby Motunui methanol plant. Until now the company hasn't had the ability to distill the same amount of crude methanol as it could produce.
All this will now see methanol production soaring to record levels. Methanex is now able to produce up to 2.4 million tonnes a year - 6500 tonnes a day - almost all of which will be exported through Port Taranaki.
The big upgrade has created 50 new fulltime jobs, the majority of them operator positions at the restarted production plant.
Methanex Corporation president and chief executive John Floren said the company was excited to be restarting Waitara Valley and to have improved the distillation capacity in Taranaki.
"These initiatives represent important milestones in reaching our growth objectives," he said.
Yesterday Port Taranaki chief executive Roy Weaver confirmed that methanol exports were expected to grow by at least a third, which will almost certainly result in the port having to invest in new larger tugs.
"The extra methanol production won't necessarily increase the frequency of tanker calls, because since methanol exports last peaked in 2000 we have increased the Port Taranaki draught from 10 metres to 12.5 metres, and this has allowed Methanex to increase its liftings by 50 per cent per ship," he said.
But while this extra trade would have an obvious positive financial impact for the port, it would also take it closer to needing bigger tugs, Weaver said.
"At the moment our tugs have bollard pulls of 38 tonnes and 40 tonnes.
"Because of the bigger tankers we are handling, it's a given on the short-term horizon we'll need to build at least one replacement tug with a bollard pull of around 65 tonnes."
A Berl economic report released in March forecast that at full production, Methanex will contribute $440m a year to Taranaki's GDP and $650m to the New Zealand GDP.
- © Fairfax NZ News