North West Shelf Gas And Methanex Sign MOU

North West Shelf Venture participants and Methanex Australia Pty Ltd (a subsidiary of Methanex Corporation of Canada) have signed a memorandum of understanding (MOU) for the supply of gas to a proposed methanol plant on the Burrup Peninsula in the Pilbara region of Western Australia.

The General Manager of North West Shelf Gas Pty Limited, Mr Akos Gyarmathy, said the agreement involved the supply of 200 terajoules of gas a day over 25 years from 2005 for a plant designed to produce two million ton of methanol a year.

Methanex Corporation supplies about a quarter of the world's methanol market and more than 30% of the Asia-Pacific market. Methanex has major production plants in New Zealand and Chile.

Mr Gyarmathy said the plant would be supplied with Australian Feedstock GasTM, a medium-pressure, industrial quality natural gas from the North West Shelf Venture’s existing facilities at Karratha.

Under the agreement, there is a provision for the NWS Venture to supply a further 200 terajoules a day should Methanex proceed with plans to double production. "Our agreement with Methanex expands opportunities for the development of an Australian Feedstock GasTM hub on the Burrup Peninsula," he said. Mr Gyarmathy said NWS Venture and Methanex intended to convert the memorandum of understanding into a gas sales agreement by the end of this year. In order to achieve this result, Methanex has made it clear that they will need to settle their fiscal and infrastructure arrangements with Federal and State governments, he said. North West Shelf Gas Pty Ltd is the Australian domestic gas marketing representative for the North West Shelf Venture.

Interests in this MOU are owned equally by the operator, Woodside Energy Ltd. (16.67%); BP Developments Australia Pty Ltd (16.67%); Chevron Australia Pty Ltd (16.67%); BHP Billiton Petroleum (North West Shelf) Pty Ltd (16.67%); Shell Development (Australia) Proprietary Limited (16.67%); and Japan Australia LNG (MIMI) Pty. Ltd. (16.67%).