Methanex to idle New Zealand production facilities by 2027

Methanex has announced plans to indefinitely idle its methanol production facilities in New Zealand starting in the first quarter of 2027. The decision follows a continued decline in domestic natural gas availability and a lack of clear pathways for new supply. To manage its remaining position, the company has entered an agreement to sell substantially all of its New Zealand natural gas contractual entitlements through the end of the decade.

Energy Resources Aotearoa Chief Executive John Carnegie noted that while Genesis Energy has secured sufficient gas to serve its customers, the shrinking supply has reached a point where it is no longer sustainable for Methanex to maintain local production. Carnegie highlighted that Methanex has historically served as a ‘safety valve’ for the electricity system by reducing production during periods of high demand or low hydro lake levels.

The move is being viewed as a consequence of long-term energy policy, specifically citing the 2018 exploration ban which halted the search for new supply as existing fields declined. While the company intends to preserve its facilities to maintain the option for a potential future restart, the idling of these plants represents a significant economic shift for the region.