Methanex pauses Taranaki plant to sell gas to electricity market

Friday, 22 May 2026

New Zealand’s largest gas user has temporarily shut down its Taranaki plant to sell gas for the country’s electricity network for the third consecutive winter.

Canadian-owned Methanex, which produces methanol at Motunui, north of Waitara, paused production for two months to redirect gas back into the market.

In a written statement in response to questions, manufacturing director Alistair Simmers said the practice had been undertaken for several winters to ease pressure on the country’s “dwindling gas supply”.

On May 1, the company posted on social media that it had begun moving into a planned two-month winter outage during the peak demand period.

During the previous two winters, Methanex halted methanol production for export and redirected gas into the electricity market.

While the company did not disclose how much it made from the arrangement, business news website BusinessDesk reported Methanex received $166.88 million over the 12 months to December 2024.

Because of the country’s ongoing gas shortages, Methanex, New Zealand’s largest gas user, reduced its methanol production from about 1.5 million tonnes in 2021 to about 507,000 tonnes in 2025, according to company reporting.

Further pressure on the sector emerged last week when the Ministry of Business, Innovation and Employment revealed the country’s economically recoverable natural gas reserves had fallen 23% over the past year to 731 petajoules.

The volume was estimated to be less than seven years’ supply at current usage rates.

The decline was driven by ongoing gas consumption and a major downgrade by OMV of estimated untapped reserves at the Pohokura gas field, off the coast of Motunui, following disappointing drilling results.

Earlier this month the government warned declining domestic gas supplies were increasing risks to electricity security, particularly during winter and dry hydro years.

In April, OMV notified the government and regulators that the Māui gas field was “expected to cease production by the end of 2026”.

Methanex chief executive Rich Sumner told analysts earlier this month the company would need to close its last remaining Taranaki plant if OMV followed through with plans to shut the Māui field, off the coast of Ōpunake.

“If that happens, we would no longer be capable of running our plant,” he said.

That added to ongoing speculation about Methanex’s long-term future in New Zealand after the company recently wrote down the value of its Taranaki operations to zero amid tightening gas supply constraints.

A Re-Energise 26 report, combining research and industry data from across New Zealand’s energy sector and released in April, estimated a Methanex closure could result in about 1357 job losses, rising to around 2000 if other industrial users also shut down.

Last month an OMV spokesperson said the Māui field had been operating for nearly 50 years and was approaching the end of its productive life.

However, no final decision had been made on the timing of its closure, they said.

“The notification to the NZ Government is a regulatory requirement for fields approaching end of production.”

“Despite substantial investments in recent years aimed at extending the field’s viability, official disclosures indicate a significant decline in gas output.”

The spokesperson said production would become uneconomic “at some point”, but the field continued to play a vital role in supporting New Zealand’s gas supply “for the time being”.