New Zealand's sole methanol producer is almost doubling production to meet rising demand from customers who are mostly in Japan, South Korea and China, a company official said on Thursday.
Canada-based Methanex announced a 10-year natural gas supply deal with New Zealand's Todd Energy that would raise output from the Methanex Motonui facility in the North Island region of Taranaki.
The company is to invest $60 million in restarting the second of its two Motonui plants, which has been idle since 2004.
The plant is expected to resume production in mid-2012 and add up to 650,000 tons of new capacity each year.
"By bringing our second Motunui train online, we will be increasing our New Zealand capacity to 1.5 million tons per annum," Methanex New Zealand Public Affairs Manager Zaneta Ewashko told Xinhua.
More than 90 percent of the methanol currently produced in New Zealand was exported to markets in Japan, South Korea and China, and that was likely to continue.
"In a market where global methanol demand is growing rapidly, additions to Methanex's methanol production capacity will be absorbed into our global supply chain to serve existing customers, " Ewashko said in an e-mail interview.
"New Zealand is strategically positioned to supply customers throughout the Asia Pacific methanol market," said Ewashko.
Asked if any particular industry was driving demand or whether exports would rise significantly to any particular countries, Ewashko said the company could not provide details to questions that were "commercial in nature."
Methanex announced the contract with Todd Energy Tuesday, saying it would enable the company to potentially produce about 7. 5 million tons of methanol over the next 10 years.
The New Zealand government welcomed the move, saying it was a likely rise of 250 million NZ dollars a year in exports and meant 500 new construction jobs.
Economic Development Minister Steven Joyce said in a statement Wednesday the agreement could generate up to NZ$1.2 billion in government revenue from royalties and taxes.
Energy and Resources Minister Phil Heatley said in the statement that the deal highlighted the oil and gas industry's significant contribution to the New Zealand economy, which employed an estimated 7,700 people and contributed NZ$2.5 billion to the country's GDP.
Ewashko told Xinhua that Methanex would release its 2011 fourth- quarter earnings next week.
The company's third-quarter earnings release in October said the New Zealand facilities provided "cost-competitive capacity" underpinned by shorter term natural gas supply contracts.
Its New Zealand facilities produced 209,000 tons in the third quarter compared with 207,000 tons in the second quarter of 2011.
The release said the company was operating one 850,000-ton per year plant at the Motunui facility at the time, but had "an additional 1.38 million tons per year of idled capacity in New Zealand, including a second 850,000 ton per year Motunui plant and a 530,000 ton per year plant at our nearby site in Waitara Valley."(Source: Xinhua)