Methanex Announces New Zealand Departure

The confirmation that Methanex will exit New Zealand has generated plenty of discussion across the energy sector. While it’s a significant milestone, it’s not an unexpected development, and its impacts have largely been anticipated by the market.

What does Methanex leaving New Zealand mean for the gas and electricity markets, and what are the main impacts we should expect?

For the gas market, in the short term we could see some surplus gas availability. However, given Methanex has already been shutting down during recent dry years, this is unlikely to improve dry-year energy security. In the longer term, with Methanex's long-expected exit now confirmed, the decline of the gas market appears increasingly likely. The bigger questions now are around LNG and future gas supply.

For electricity, there will be a reduction in demand at Motunui, but this is relatively small. We don't expect this to have any long-term effects on wholesale electricity prices beyond what we were already preparing for.

Was Methanex leaving New Zealand a potential scenario that was already factored into our current quarterly Price Path and monthly Price Forecast, or is this a new development for our modelling?

Yes. Our gas forecasts have accounted for Methanex's potential departure for years. In our most recent forecasts, we assumed a permanent exit from 2027 in almost every gas price trajectory.

What does this mean for Energy Link's forecasts?

While Methanex's exit is a significant headline, the industry has been preparing for this change for a long time, and so have we. For clients, this means the key implications of Methanex's departure are already reflected in our Price Paths, PFCs, and long-term market outlooks. The focus now shifts to the future structure of New Zealand's gas market and how future supply challenges will be managed.