27 January 2011 23:08 [Source: ICIS news]
"We don't think it's high, but there is a risk," Methanex CEO Bruce Aitken said. "We're not out of the woods yet."
Methanex runs only one of the four methanol plants it owns in Chile because of weak natural gas supplies there.
Officials at the state-run energy company, known as Enap, were quoted in media reports earlier this month saying declining reserves might lead to cutbacks in Methanex's gas supply as early as May, when winter begins in the Magallanes region of Chile.
In a conference call, Aitken said reduced production from Chile was one of the problems that would lead the company to report lower earnings in the first quarter this year.
"We've been digging ourselves out of a production hole over the last two to three years," Aitken said.
Methanex gets roughly a third of its gas in Chile from Enap and the other two-thirds from its joint venture deals in drilling for oil and gas there, he said, adding that finding new gas was taking longer than he expected.
"I was completely wrong," Aitken said. "We're just learning that this is taking a lot of time."
Methanex's Chilean production could come in lower this year, though he expected 2011 to be roughly equal with the company's 2010 production.
"We expect to achieve this year about what we achieved last year," Aitken said.
The recent startup of Methanex's Egyptian plant will help improve production numbers, he said, adding that the restart of its plant at Medicine Hat in Canada's Alberta province was on track for the second quarter of 2011.
Aitken said the planned April restart of that unit remained a "high probability" because the company had already purchased gas supplies through October 2012.
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