Energy: Gas crisis pushes methanol plant to US

By March 8, 2017August 17th, 2018Methanol Market, US Methanol

Mar 8 2017 at 11:45 PM

By Ben Potter

The east coast gas crisis has pushed Perth-based Coogee Chemicals to the brink of a decision to ship a mothballed methanol plant from Melbourne’s west to the United States for reassembly and expansion.

With the existing 250-tonne-a-day plant would go the prospect of a new $1 billion export plant that the company abandoned three years ago because it could not get the gas it would have needed to run it in Victoria.

It’s the latest example of jobs and investment being sacrificed to Australia’s unfolding energy crisis. The Australian Financial Review reported on Wednesday that eastern states manufacturers would be left short of gas this winter unless Queensland’s liquefied natural gas exporters redirected gas to the local market, yet NSW and Victoria have thwarted new onshore production.

That’s pushed domestic gas prices to unaffordable levels – if local firms can get gas at all – and helped push electricity prices to record levels, leading to the loss of about 100 jobs at Rio Tinto’s Boyne Smelters.

More than 70 jobs and about 250 indirect jobs are also threatened at National Ceramic Industries Australia, based in Rutherford in the NSW Hunter Valley, because the company cannot operate profitably at the $20 a gigajoule gas price offered by AGL Energy, managing director Chris Schneider said.

‘Blood in the streets’

Coogee Chemicals owner, Rich Lister Gordon Martin, warned in The Australian Financial Review three years ago that there would be “blood in the streets” if the eastern states didn’t embrace unconventional onshore gas production and make gas available for local industry.

Chief executive Grant Lukey said the warning had come to pass. “There is blood in the streets and it was known about years ago and it’s too little too late – all those LNG plants are literally sucking up every available gigajoule of gas.”

Coogee’s existing plant at Laverton, west of Melbourne, was mothballed a year ago with the loss of 30 direct jobs and indirect jobs such as cleaners, maintenance contractors and suppliers. One casualty was Coogee’s supplier of industrial gases, France’s Air Liquide, which is understood to have had to restructure its business in Victoria as a result.