Methanex to effectively close and sell off gas contracts
Methanex, New Zealand's largest gas user, plans to idle its plant and sell its gas contracts due to a severe shortage of natural gas. The move is expected to impact local employment and potentially increase gas prices for other consumers.
Why it matters
The closure highlights the energy security challenges facing New Zealand and the economic impact of declining natural gas production.
New Zealand's largest gas user Methanex is to effectively close its plant and sell off its gas contracts.
Methanex said a lack of natural gas and a clear pathway to new supplies meant operations in New Zealand were no longer sustainable.
The Canadian-owned company said it had now entered into an agreement to sell all of its New Zealand natural gas contractual entitlements, commencing in the first quarter of next year.
It said it then planned to safely idle and preserve the facility for long-term optionality, should future circumstances support a restart of operations.
The company has in the past been responsible for taking around 30 to 40 percent of all of New Zealand's natural gas production.
ln recent years the country's natural gas production has declined rapidly with little new supply coming on board.
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