Optimism on methanol

Press, 13 September 1982, Page 6

Optimism on methanol

From G. G. SHAND, Ottawa Nova Corporation's heads are confident New Zealand will be able to market its methanol profitably when it is in production in 1984, in spite of what they readily admit to be a big glut on. the world market at present. Executives of the huge Albertan Energy Corporation — whose subsidiary, Alberta Gas Chemicals, is a joint partner in the methanol plant being built in Waitara in Taranaki — agreed that the methanol business has struck bad times.

Shortly after giving the Prime Minister, Mr Muldoon, a private briefing on prospects for the petro-chemical industry, they told New Zealand journalists that because of a; combination of new plants and the general recession, there was “a vast oversupply" of methanol. Plants world-wide were working about 60 per cent

“New Zealand Herald” capacity, and six new methanol plants are expected to begin production over the next two years: the New Zealand plant, two in Canada, one in the United States and two in Saudi Arabia.

According to Mr John. Feick, senior vice-president in charge of business development, New Zealand need not be overly concerned.

The New Zealand plant was still under construction and would have a lifespan of between 20 to 25 years, he said.

“It will go through several periods of oversupply and undersupply,” he said. “This goes on all the time.” • Mr Feick, who was in New Zealand a few' weeks ago looking over the Waitara project, said that 1 the petrochemical industry was well used to such ups and downs. • It might look bad at the moment but Nova was confident the market was "bot-

toming out" and that demand would improve, as would methanol's price.

The briefing Nova officials gave Mr Muldoon in their brand-new $lOO million stainless steel skyscsraper complex in Calgary, concentrated mostly on the future for the petro-chemical industry.

Mr Muldoon said later that the' message was generally “more optimistic” than New Zealand had been led to believe in recent reports.

There had -been suggestions that the entry of Saudis, particularly in the petrochemical industry, would have a serious impact and make the field highly competitive. Nova’s analysis was that this impact' might not be as great as first thought. Mr Muldoon said New Zealand would have to decide within the next two years on th’e “second stage" project it should choose in using Maui gas.

"We are looking at taking some of the other products out of the ■ gas stream and turning them into.some of the raw materials the petrochemical industry needs." he said.

Mr Muldoon said that one of the main advantages for New Zealand u 7 as that it had the feedstock on the spot, whereas other countries (such as Japan) were now finding it too expensive to transport the basic feedstock from the Middle East for conversion for use in the petro-chemical industry.

One of the second-stage industries New 7 Zealand could opt for would be producing ethylene, derivatives of which are used in a wide variety of consumer goods, ranging from shower curtains to gramophone records.

Nova Corporation believes New Zealand could build a world-scale ethylene plant. However, no firm proposition was put forward in the talks.