Darwin could host country's only methanol plant
Updated
A $500 million methanol plant with the capacity to produce 1,000 tonnes a day of the chemical could begin operating by 2024 in the Darwin Harbour.
Key Points:
- Western Australian company Coogee has announced a new feasibility study for a methanol plant in Darwin
- A previous, similar study by another company 10 years ago did not result in construction
- Coogee’s chief executive said they were “not even factoring in” onshore fracking supplies for the project
The project will require 40 terajoules of gas per day for production but the company’s chief executive indicated they would not be looking to pull from any newly tapped reserves from the NT’s emerging fracking industry.
“We’re not even factoring in onshore developments for this project,” Coogee chief executive Grant Lukey said.
“We don’t need it at all. What we have discussed is offshore conventional gas.”
Coogee, a Western Australian chemical company, has announced a feasibility study into building Australia’s only methanol plant, located in the Middle Arm industrial precinct in Darwin.
The area is already home to ConocoPhillips’ LNG processing plant and the Inpex gas plant.
Project could create 1,000 new jobs
Mr Lukey said projects like this required, “supportive governments and an abundance of natural gas”.
Mr Lukey would not confirm where exactly the company would source the significant amount of offshore gas needed per day for production.
Inpex confirmed in 2013 that all gas from it’s plant had been forward-sold to international markets.
ConocoPhillips was also reportedly considering selling off its NT assets last month, as stated in the Australian Financial Review.
But Mr Lukey indicated the company was, “comfortable already that we have secured a significant tranche of gas to underpin the project.”
Northern Territory Chief Minister Michael Gunner said the project would support more than 1,000 new jobs during construction and a “further 350 direct and indirect jobs during operations”.
He said the methanol plant would form a part of a “manufacturing hub” in Darwin for gas production and services by 2030.
East coast market failure blamed for prior plant’s closure
Coogee previously closed Australia’s only other methanol plant in Laverton, west of Melbourne.
Methanol is used as a fuel additive and in the manufacture of products such as textiles and pharmaceuticals.
Mr Lukey said Coogee mothballed the plant in 2016 because of extreme changes to gas prices in the east coast market.
“The east coast gas market is not a competitive gas market and you cannot secure a competitive price,” he said.
“It has not changed since.”
US-based company Magellan Petroleum Corporation also commenced a feasibility study into a Darwin methanol plant in 2009, but no facility was ever constructed.
NT has a ‘competitive advantage’
Mr Gunner said the NT had an edge on east coast markets, due to its proximity to international trade opportunities.
“It is difficult to do business on the east coast, especially when it comes to gas,” he said.
“There is a competitive advantage to being established here in the north, so close to the markets of Asia.”
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