Methanex says the restart of its Waitara Valley plant and the upgrade at Motunui made 2013 one of the most significant for the New Zealand business in 20 years.

The project, intended to increase the firm’s annual production capacity by between 700,000 and 900,000 tonnes, was delivered on time and under the $250 million budget.

Production to date has exceeded expectation, with the two sites combined delivering more than 6,300 tonnes of methanol a day.

Methanex says the scale of the work, its cost, complexity and the unknown condition of some of the units being restored, meant the company had to come up with a range of initiatives to minimise the risks the project faced on a range of fronts.

At Motunui alone, the project involved 1,150 jobs over 75 days and saw more than 1,200 staff and contractors on site at peak times. At its height, the firm was spending more than $1 million a day on labour alone.

To keep control of the process and to minimise the cost, Methanex dropped an earlier plan to appoint external project managers and carried out that work internally.

Costs were reported daily and a dedicated team was formed to deal with unexpected engineering issues, so that project managers could keep their focus on the overall schedule.

The project involved 1.3 million man-hours and ran from January through October.

Work programme

The work started at Waitara Valley, where mechanical, electrical and control systems were inspected, repaired and commissioned. The plant’s idled distillation unit 2 was also restarted after a nine-year shutdown in order to end a constraint on production of methanol at Motunui.

At Motunui, the number 2 plant was shut and inspected for repairs and upgrades. The reformer was overhauled and a series of other capital upgrades were completed. The site’s distillation units -3 and -4 were also inspected, repaired and restarted.

On completion, the three processing trains operated together for the first time in 10 years.

Production in the first quarter of 2014 climbed to 500,000 tonnes, up from 349,000 six months earlier, and annual capacity will climb to 2.4 million tonnes, depending on gas composition, from 1.5 million.

Methanex says the project, restarting the plants after nearly seven years of being idle, vindicates the firm’s confidence in the country’s exploration efforts.

And the broader benefits from the project are material. As well as extending the skills base of the country’s contractors, the three-plant operation will require more on-going support and maintenance, as well as increasing exports through Port Taranaki.

Business and Economic Research (BERL) estimates the enlarged operation will contribute $650 million to the country’s GDP annually, including the generation of 650 jobs in Taranaki and 1,200 jobs throughout New Zealand.

The Energy Project of the Year Award category is sponsored by ITL