MercoPress. South Atlantic News Agency

Methanex plant in P. Arenas will appeal to coal for electricity

Canada's Methanex plant in the extreme south of Chile is planning to generate electricity from coal thus sparing more natural gas to convert into methanol, announced the company in Punta Arenas.

The huge complex a few miles away from Punta Arenas is one of the world's leading producers of methanol but has seen output drop considerably because of limited supply of natural gas from Argentine providers. "Generating electricity from coal will enable us to divert that natural gas to the production of methanol", said a company source quoted in the local Prensa Austral. The energy savings would help increase methanol output by 300 metric tons per day. The coal boiler is estimated would demand an investment of 40 million US dollars. Coal is to be supplied by a local mine Loayza which has 10 million tons in proven reserves which at current extraction means a horizon of 30 years. Company sources said that once the investment has been approved by headquarters in Canada and the environment impact assessment study is finished and approved "we can begin moving". Methanex is the major investment in Magallanes region and originally was to be supplied from the abundant natural gas resources of neighboring Tierra del Fuego and Santa Cruz provinces in Argentina. However Argentina has frozen gas prices and because of insufficient investment and production has decided to privilege domestic consumption and only pumps to Chile when there's a surplus.