Methanex writes down Taranaki operation to zero amid NZ natural gas decline
Wednesday, 11 March 2026
Methanex has written down the value of its New Zealand operations to zero reflecting the challenge it’s facing to keep its Taranaki methanol plant operating.
In its recently released 2025 annual report, the Canadian-owned company said future earnings from the Motunui plant were not enough to justify its value on the books, leading to a non‑cash write‑down of about US$71 million (NZ$120 million).
The company’s annual report said the “recoverable amount of nil” was due to declining natural gas supply in New Zealand and uncertainty over whether contracted gas volumes would be delivered or future gas exploration would be successful.
Methanex still had agreements with gas suppliers, some extending until 2029, but the company said it could not be sure these contracts would deliver the volumes needed.
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“The future operation of our New Zealand facilities depends on the ability of our contracted suppliers to meet their commitments and the success of ongoing exploration and development activities in the region,” the report said.
“We cannot provide assurance that our contracted suppliers will be able to meet their commitments or that exploration and development activities in New Zealand will be successful to enable us to operate at capacity or at all.”
The company is a significant employer in Taranaki, with around 150 full-time staff.
During plant maintenance shutdowns the company employs hundreds of contractors, many of whom live locally.
Methanex uses about 45% of New Zealand’s gas to produce methanol, most of which is exported.
The write-down coincided with a sharp fall in New Zealand production levels.
The Motunui plant produced 0.5 million tonnes of methanol last year, down from 0.7 million tonnes the year before, a fraction of the 3.3 million tonnes produced at Methanex’s Geismar plant in the US.
The decline came after the company reduced Motunui to a single plant in September 2024 and shut nearby Waitara Valley plant indefinitely in 2021.
The company said lower production levels were also due to lower-than-expected gas deliveries and the temporary sale of gas to New Zealand electricity generators during peak winter demand.
While Methanex did not disclose earnings from the gas for electricity sales in 2024, at the time it said the arrangement could boost earnings.
“These commercial arrangements are expected to positively impact Methanex's Q3 and Q4 2024 earnings with after-tax proceeds expected to meaningfully exceed the margin lost on New Zealand methanol production delivered to customers,' it said in a statement to the Toronto Stock Exchange.
The challenges at Methanex come as the ageing Māui gas field, once New Zealand’s largest nears the end of its life.
Production from Māui has been steadily declining for years and MBIE forecasts suggest it could cease output within the next few years without further drilling or investment.
The Methanex annual report said continuing decline in gas production “will make it challenging to continue operations” in New Zealand and was working with suppliers and the Government to “optimise our operations”.
The Methanex Taranaki write down follows an announcement last month that the Government would build a $1 billion Liquified Natural Gas import facility in Taranaki to help ensure electricity supplies during dry years.
The facility could reduce annual power costs by $265m, with households expected to see about $50 in annual savings.
However, the proposal has also faced criticism for locking the country into greater fossil fuel dependency.