Natgas woes still hamper Methanex Chile plant

06 September 2007 00:34  [Source: ICIS news]

HOUSTON (ICIS news)--Methanex said on Wednesday its Chilean methanol production facility continued to operate only one of its four plants because natural gas exports from Argentina to the plant have not been re-established.

"We understand that there are no technical reasons that support current Argentinean natural gas export restrictions and we have been advised that there is no more transportation capacity to take available natural gas from Argentina's southern Austral region to the north,” said Methanex president and chief executive Bruce Aitken.

Methanex earlier this year cited equipment failures affecting two major Argentinean natural gas suppliers, but those problems were apparently resolved, the company indicated.

“Argentina has experienced a particularly cold winter this year,” Aitken continued. “In prior years, as the weather warms around this time of year, natural gas restrictions have come to an end. We are in continual contact with our Argentinean natural gas suppliers, the Argentinean and Chilean energy authorities and advisers to better understand this situation and the different courses of action that are available to us.”

Production from Methanex’s 3.84m tonne/year production complex in Punta Arenas from 11 June 11 to 30 August was 207,000 tonnes, Aitken said. “However, despite the production restrictions at our Chilean operations, we have continued to fully supply our customers from inventory, production from our other facilities, and with purchased product."

He added, "We are disappointed with the level of production from our Chilean operations and, as we have stated previously, we believe our long term solution to the natural gas supply challenges we face at our Chilean operations is to increase our reliance on Chilean natural gas.”

Aitken said Methanex was taking a number of actions to help accelerate gas developments in the southern region of Chile.

The Chilean government has recently announced that about 20 international companies and consortiums were participating in a bidding process to open exploration and gas development in large areas of Chile's southern gas-producing region to the private sector, Aitken said.

GeoPark, a private company that supplies gas to Methanex in Chile, recently announced its third gas discovery in the Fell Block near Methanex’s installations; and ENAP, Chile's national petroleum company and Methanex’s biggest gas supplier in Chile, was progressing in new developments in the Magallanes Region, Aitken said.

“The current activity in the area illustrates its considerable potential for natural gas development and for this area to provide us with a long term solution for gas supply to our Chilean Hub," Aitken said.

By: Brian Ford
+1 713 525 2653

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