Methanex to keep Chile methanol output cuts

13 March 2008 02:51  [Source: ICIS news]

SINGAPORE (ICIS news)--Methanex, the global methanol major, will continue operating its Chile plants at 30% after natural gas supplier Argentina raised its export duty, the company said late on Wednesday.

The Argentine government has increased the natural gas export duty from 45% to 100% of the highest contracted import price of natural gas into the country, Methanex said in a statement.

The hike would translate into an export duty of approximately $7/mmbtu, it added,

"We have been operating our plants at only 30% capacity since June 2007 as a result of the curtailments of natural gas exports from Argentina," the company’s Latin America senior vice president, Paul Schiodtz, said.

"Given the announcement of increased duties, we do not expect to change the operating rate of our plants," he said adding that the company’s gas contracts required gas suppliers to pay any duties levied by the government of Argentina.

"We are disappointed in the way the export duties were implemented as we believe it did not take into consideration the impact on the economy of southern Chile. In addition, there is no excess pipeline capacity available to transport the gas from southern Argentina to the most populated regions of that country," he added.

Methanex has not received official notification that gas supply would be restored to its plants, it said.

The company’s long term strategy to source for more gas supplies from Chile will continue, with its new exploration projects in the Magallanes region of Chile by state-owned ENAP and other international oil and gas companies, the company said in a statement.

Methanex, listed on the Toronto stock exchange, is a global producer, distributor and marketer of methanol.

For more on methanol, visit ICIS Chemical Intelligence

By: Arujnee J Ram
+65 6780 4359

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