Methanex arranges gas supply for methanol plant in Australia

Nov. 1, 2001
Methanex Corp. has arranged for gas to supply a methanol plant to be built on the Burrup Peninsula in the Pilbara Region of Western Australia.

By the OGJ Online Staff

HOUSTON, Nov. 1 -- Methanex Corp., Vancouver, said Thursday it has arranged for gas to supply a methanol plant to be built on the Burrup Peninsula in the Pilbara Region of Western Australia.

The agreement is with the North West Shelf gas participants. The parties have begun negotiating a detailed gas sales and purchase agreement (GSA).

Methanex said the signing of the GSA is dependent on the Australian federal government's approval of a support package. The terms of a package were agreed when the project was proposed for the Northern Territory, and Methanex has requested the transfer of the package to Western Australia.

Bruce Aitken, Methanex's senior vice-president for Asia Pacific, said, "We are delighted to have been able to move so quickly to replace the gas supply arrangement that we had secured in Darwin. The NW Shelf venture saw us as a substantial and credible customer and was prepared to move very quickly to satisfy our timelines. Our only significant remaining hurdle to progress the project into detailed engineering and financing is the agreement with the federal government. We have every expectation that this agreement will be finalized before the end of 2001 and that our project can remain on schedule for a final investment decision before the end of 2002 and for plant start up in late 2005."

Methanex is planning, in the first phase of the project, to build what it called the world's largest methanol plant with a capacity of about 2 million tonnes/year to supply customers in the Asia Pacific region.

That phase of the project will employ more than 1,000 people during construction and 150 people when operational. It will generate export revenues of about $600 million/year.

Methanex said its letter of intent to buy gas from Sunrise field in the Timor Sea has lapsed and will not be renewed.