Methanex Departure to Boost Gas Supply and Prices
New Zealand's largest gas consumer, Methanex, is set to leave the country next year after deciding to close and sell off its gas contracts. The Canadian multinational was using nearly half of New Zealand's total natural gas supply, releasing a significant amount of gas into the market.
The departure of Methanex has been described as 'a big shift' and 'a big deal' for the local Taranaki economy by Ben Gerritsen, general manager of customer and regulation at Clarus, which runs the gas transmission network in the North Island. However, Gerritsen notes that it's not surprising given the decline in New Zealand's gas production.
Gerritsen expects an easing in gas prices for both industrial and household users in the near-term due to increased supply. He believes that Genesis Energy, which has picked up major gas contracts from Methanex, may redirect gas to electricity generation during winter months when demand is high.
However, Gerritsen warns that households should not expect a price drop, particularly in the North Island where fixed costs are involved in the pipeline supply network. Further into the future, Methanex's absence could drive up prices as local sources become scarce.