Canadian methanol producer Methanex has signed a 14-year agreement with Painted Pony Energy for supplies of feedstock natural gas, Methanex said Thursday.
A Calgary-based gas producer, Painted Pony will supply the majority of the gas required for Methanex's 600,000 mt methanol plant in Medicine Hat, Alberta, Methanex said in a statement.
The agreement will start in 2018 and features a competitive fixed price for gas, the company said without elaborating.
Contracted quantities will be lower in earlier years to allow for Methanex's pre-existing natural gas forward purchase contracts, and will increase to roughly 50,000 MMBtu/d, or approximately 80%-90% of the plant's gas requirements from 2023, the statement said.
"Having a long-term agreement in place to support our Medicine Hat facility underpins a competitive cost position for years to come," said John Floren, president and CEO of Methanex. "This agreement, combined with the 2015 refurbishment of our Medicine Hat plant, solidifies the long-term future of Methanex's methanol operation in Canada."
