|Monday, 24 June 2002|
Neil Ritchie, New Zealand
Methanex Asia-Pacific boss Bruce Aitken says appointing independent experts to settle the Maui redetermination row should prove to be a win-win situation for all concerned.
|Bruce Aitken, chief of Methanex Asia Pacific.|
"It's a good outcome, which gives a lot more certainty and is very sensible. Everybody is very happy with it," said the Asia-Pacific vice-president from Perth.
"As well as determining the level of economically recoverable reserves, the expert will also determine if enough information was provided and in an appropriate fashion. That was the one issue we were raising through the courts."
Last Thursday Natural Gas Corporation said an independent firm would be appointed to decide the level of remaining Maui gas reserves, with Methanex New Zealand withdrawing its High Court proceedings against the field owner, Maui Development Limited and the Crown.
Aitken said the parties had named three firms as front runners for the job. The process of selecting the company able to offer the best deal should only take a couple of weeks.
All parties were happy with any of the named parties and the chosen company would be paid on an agreed basis by MDL, the New Zealand government and the three buyers - Methanex, NGC and Contact Energy.
Last week EnergyReview.Net said two of the international firms regarded as frontrunners to be appointed to investigate the Maui redetermination matter - the most important issue facing the New Zealand energy industry in years - were Forrest Garb and Associates and Gaffney Cline. The New Zealand government's Treasury department has used Texas-headquartered Forrest Garb in the past, while it is understood Methanex and NGC have both used Gaffney Cline.
Degolyer and MacNaughton could be considered another frontrunner.
Aitken denied recent reports that the methanol manufacturer was now resigned to being allocated less Maui gas and this would hasten the demise of Methanex in New Zealand.
"No, definitely not. We are very pleased with this outcome. All parties have rights to make submissions so we will be making our views known to the Independent expert.
"The independent expert will not be able to do his job without adequate information, so this (Methanex presenting its case for inadequate disclosure) is an important first step."
Industry commentators say the appointment of the expert will give finality to an issue which could have dragged on for perhaps two years and only been resolved by the London-based law lords, the Privy Council.
"At least this is better than the parties continuing to beat each other up in the courts, which was not the smartest thing to do," said one observer.
MDL shocked the New Zealand energy industry last November when it announced that Maui could be depleted by mid-2007 instead of the contracted 2009. New reservoir studies indicated only 3800 Petajoules (PJ) of recoverable gas were originally in place - not the 4085PJ on which the MDL-government contracts were based. MDL later asked for a formal redetermination - an effective re-allocation of remaining reserves between the major users.
NGC and Contact Energy can survive losing physical gas and rights to pre-paid gas, NGC less so than Contact. However, losing physical gas will put Methanex NZ out of business.
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