Weird News

Methanol producer Methanex is to temporarily cut production at its Taranaki site to free up natural gas supply for electricity generation over winter.

Methanol producer Methanex is to temporarily cut production at its Taranaki site to free up natural gas supply for electricity generation over winter.
The company has agreed to a short term gas supply of between 3.4 to 4.4PJ (petrajoules) to Genesis Energy to support a secure supply of natural gas for the countrys electricity system, it was announced on Friday.
Methanex will idle one of its Motunui plants for close to three months during the winter, and release natural gas to support the countrys electricity sector, a joint company statement said.
This follows the company’s move in April to mothball the Waitara Valley plant, which resulted in the loss of 75 jobs.
The agreement comes at a time when the electricity market remains under some stress due to low hydro levels and tight gas supply and has relied on Huntly Power Station to fill the void left by renewable resources, the statement said.
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The decision provided the energy equivalent of having up to 84 per cent of the storage capacity of Lake Taup, and will also mean lower carbon emissions for the country, with gas as fuel emitting approximately half the emissions of coal on an energy equivalent basis, it said.
This will help support electricity generation through winter and ensure electricity and gas supply to our customers and other market participants, Genesis Energy chief executive Marc England said.
It is another example of co-operation between the electricity, gas and manufacturing sectors to support New Zealands security of supply at a time of stress for both the gas and electricity markets, he said.
Methanex played an important role by underpinning the long-term development of New Zealands upstream gas sector, chief executive Dean Richardson said in a statement.
We are pleased to have reached this collaborative agreement with Genesis to demonstrate and support the countrys energy stability and security.
Global demand for methanol is strong as economies around the world are rebuilding and natural gas-based methanol is increasingly regarded as a key part of a low emissions world and as a clean-burning fuel, he said.
Natural gas used for methanol production will be redirected to generate electricity over winter.
Methanex will use its global leadership supply position to mitigate the loss of this production and ensure security of supply to its customer base, he said.
As the New Zealand electricity sector continues to decarbonise to more than 90 per cent renewable energy supply, flexible and certain gas supplies will be critical to the low-carbon transition, and reduce reliance on coal and ensuring energy security and a well-planned transition for all, he said.
Oil and gas sector representative group Energy Resources Aotearoa said the decision by the two companies was a good outcome in a tricky situation”.
While it was pleasing to have natural gas available to keep the lights on and businesses operating in the longer term a better solution was needed, ER chief executive John Carnegie said.
New Zealand cannot afford to keep cutting back on economic activity just to keep the lights on.
Reducing methanol production was a clear impact of low hydro lake levels and a tight supply of natural gas, he said.
It showed how important natural gas production was to the national economy because there was no affordable, reliable or practical alternatives ready yet, he said.
In an earlier statement Carnegie said constrained gas supply could lead to energy shortage, higher prices and job losses.