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Methanol plant poised to resume

Decision will be made early next year.

ROB MAETZIG
Last updated 05:00 07/11/2012
tdn waitara mid
The Waitara Valley methanol plant could be recommisioned

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The Waitara Valley methanol plant, which has lain idle for six years, could be back in operation within months.

The plant, which was shut down because of a lack of contracted gas supply, could add another 530,000 tonnes to Taranaki's methanol export industry.

Methanex New Zealand confirmed yesterday that investigations into Waitara Valley will be completed before the end of this year, and that a decision on whether to restart will be made early next year.

While Methanex never publicly confirms where it gets its gas from - it says it has contracts with several suppliers - industry sources say the Waitara Valley investigations are largely a result of continued drilling success by Todd Energy at its nearby Mangahewa gas field.

Early this year Methanex and Todd signed a 10-year gas supply agreement, which enabled the methanol producer to restart its second production train at Motunui.

Now, Todd is expected to spend more than $100 million doubling the size of its McKee-Mangahewa production station so it can handle the gas it is striking via an expansion project at its Mangahewa field, where more than 20 wells are being drilled.

No contracts for this expansion project have yet been let, but announcements are expected before the end of this year, and commissioning of the new plant is expected in early 2014. When completed, it will increase the station's production capacity from 20 to 45 petajoules of gas a year.

Methanex is also investigating ways of streamlining the supply of methanol from its nearby Motunui plant in an effort to increase exports from that site.

At present, Motunui is hindered by the capacity of towers that distil raw methanol flowing from the site's two production units.

The company said that if this project was successful, and Waitara Valley was restarted, total methanol production could soar to 2.2 million tonnes a year, up from the current 1.5 million tonnes.

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