Methanex hopeful on Argentina's gas exports

27 September 2007 23:14  [Source: ICIS news]

HOUSTON (ICIS news)--Canadian methanol producer Methanex was hopeful that Argentina would soon resume exports of feedstock natural gas to the company’s 3.8m tonne/year methanol complex in southern Chile, a company official said on Thursday.

Chief executive Bruce Aitken remained uncertain about when and to what degree Argentina would resume exports of feedstock natural gas, but said he was optimistic that supply would be at least partially restored in the coming weeks.

Exports of energy were “very much on the agenda” for Argentina’s government, he said. Some analysts have said that Argentina's national priorities could delay the supply of gas to Methanex's idled lines till 2008.

Methanex's world-scale production facility was running at 800,000 tonnes/year, or 21% of nameplate capacity. The site was expected to ramp up to 1m tonnes/year rates in the next couple of weeks on increased supplies of Chilean natural gas, Aitken said.

It would become increasingly difficult to fully supply Methanex’s contractual obligations the longer the units in Chile were idled, he added.

“Our view is that methanol prices need to escalate substantially to return supply and demand to a normal balance,” Aitken said. He noted that North American methanol spot prices have risen above $500/tonne (€355/tonne) in recent weeks

Argentine natural gas accounts for 60% of Methanex’s consumption in Chile, feeding the production of 2.3m tonnes of methanol annually.

Methanex’s 1.9m tonne/year methanol plants in Trinidad were currently operating successfully, Aitken said.

($1.00 = €0.71)

By: David Barry
+1 713 525 2653

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