MercoPress. South Atlantic News Agency

Argentine energy policy further limits methanol production in south Chile

Nestor and Cristina Kirchner energy policy cut the provision of natural gas

Canada’s Methanex Corporation announced on Thursday that because of severe restrictions in the provision of natural gas to its plant in the extreme south of Chile, Punta Arenas, Magallanes Region, the company is forced to another re-structuring which will leave 48 people redundant.

“As a consequence of the severe restriction in the supply of natural gas to our Cabo Negro complex, which is already operating at restricted capacity, only one of our four methanol producing plants, Methanex has decided an organization restructuring in Chile which means 48 people will have to leave the company” announced Paul Schiodtz, Methanex Chile general manager.  

He added the purpose of the restructuring was to ensure an effective organization and to optimize production of the company in Chile, at competitive costs. “Our previous organization in Chile was designed to operate two plants, which we have concluded is not feasible in the near future”.

Schiodtz said it has been a painful decision because the company has been unable to elude the very complex situation which is a lack of natural gas provision. 

He added that it is well known that the board of Methanex has decided to transfer one of the several production units in Chile to Geismar, Louisiana, United States, “a project in which we are working”. But despite this adverse situation the company “has a long term commitment with solving the power problem which impacts on the whole of the Magallanes region”.

“We believe Methanex is part of the solution since our demand for natural gas has propped the development of the Magallanes hydrocarbons’ industry and introduces a long term element to the regional energy market since it is a sustained demand and not seasonal, as for the rest of the region”.

Methanex finally recalls that it has already done two previous restructures since Argentina started cutting the provision of natural gas in mid 2007, in breach of contract. The first in 2008 cost the jobs of 42 people; in 2009 another 37 jobs were involved and now with the latest decision, the work force of the plant has been cut to 50% when the launching of the methanol processing plant.

Methanex established in Punta Arenas in the nineties following on a contract with Argentina for the sustained supply of natural gas from neighbouring Tierra del Fuego. However when the Kirchner couple reached the Casa Rosada, the policy changed drastically and the domestic market was privileged over exports despite contracts.

Currently Argentina has become a net importer of natural gas in winter months.