{"id":594046,"date":"2026-09-08T16:08:15","date_gmt":"2026-09-08T16:08:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/594046\/"},"modified":"2026-09-08T16:08:15","modified_gmt":"2026-09-08T16:08:15","slug":"what-methanexs-departure-will-do-to-gas-prices","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/594046\/","title":{"rendered":"What Methanex\u2019s departure will do to gas prices"},"content":{"rendered":"

Ben Gerritsen is general manager of customer and regulation at Clarus \u2013 the company that runs the gas transmission network in the North Island. He told Nine to Noon on Tuesday it was a \u201cbig shift\u201d and \u201cbig deal\u201d for the local Taranaki economy, which Methanex was a part of for more than four decades \u2013 but not a surprise.<\/p>\n

\u201cThinking about Methanex\u2019s decision in the context of the overall gas market, it\u2019s not surprising and it is part of a transition in the New Zealand gas industry that started a few years ago when supply constraints<\/a> started to emerge and gas has kind of been redirected, if you like, to its highest value use.<\/p>\n

\u201cMethanex\u2019s business model globally is to operate in countries with plentiful gas and export that in the form of methanol. So with the decline in gas production in New Zealand<\/a>, it\u2019s not surprising.\u201d<\/p>\n

But will it translate into cheaper prices for other users, be they industrial or household? Gerritsen said he had to be \u201ccareful\u201d predicting future prices, but expected an easing in the near-term for both.<\/p>\n

And it might even help some companies stay afloat, rather than shut up shop due to high costs<\/a>.<\/p>\n

\u201cUltimately that is in the hands of the gas retailers in terms of competition between the likes of Genesis Energy, Contact, Nova, others. But certainly having availability of more gas, that\u2019s been the key constraint in recent years.<\/p>\n

\u201cSo when you\u2019ve heard industrial consumers being concerned that they can\u2019t get a contract on terms that they used to, I think this extra supply in the short term will help that challenge.\u201d<\/p>\n

But the challenge remained in the long term, he said, because New Zealand\u2019s known gas fields were \u201cin a pattern of decline\u201d with some expected to close soon.<\/p>\n

Big energy companies, such as Genesis, had limited capacity to store gas, Gerritsen said \u2013 and may use what it has to produce electricity when needed.<\/p>\n

\u201cI think what Genesis may well look to do is, the sort of flexibility that Methanex has provided in recent years where it will essentially turn off during winter and redirect the gas to electricity generation \u2013 we may see Genesis look to other industrial customers to operate in a similar mode.<\/p>\n

\u201cSo the industrial consumer will get the gas on relatively favourable price terms. It can use it during summer, it can use it during wet years. But when the electricity generator is needed, the gas can be redirected to generate electricity.\u201d<\/p>\n

Households should not expect a price drop, particularly in the North Island where there are fixed costs involved in the pipeline supply network.<\/p>\n

\u201cThe costs of the pipeline network and delivering gas throughout the North Island are essentially fixed. They\u2019re the infrastructure costs of transporting the gas.\u201d<\/p>\n

Further into the future, Methanex\u2019s absence could drive up prices, Gerritsen said, as local sources become scarce.<\/p>\n

\u201cMethanex has played a critical role as a big consumer in underwriting exploration and production of gas in New Zealand. So no doubt not having them around makes what is a challenging proposition even more challenging, I would say.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Ben Gerritsen is general manager of customer and regulation at Clarus \u2013 the company that runs the gas…\n","protected":false},"author":2,"featured_media":594047,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[138,49088,6309,16460,292853,111,139,37968,75704,69,12937,61,6923,1533],"class_list":["post-594046","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-departure","tag-do","tag-gas","tag-methanexs","tag-new-zealand","tag-newzealand","tag-nine","tag-noon","tag-nz","tag-prices","tag-to","tag-what","tag-will"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/594046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=594046"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/594046\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/594047"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=594046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=594046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=594046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}