By James Wood

Methanex signs long-term gas supply deal

Nov 13, 2017 | 11:22 AM

MEDICINE HAT, ALTA-A major natural gas facility in Medicine Hat has secured the next 14 years of it’s future.

According to a press release issued by the Methanex Corporation, the company has signed off on a deal with Painted Pony Energy LTD, which will see Painted Pony supply the majority of the natural gas needed for the methanol plant in Medicine Hat until 2032.

The agreement will start in 2018, with a fixed price for the gas. While there will be lower quantities at the start due to pre-existing deals established by Methanex, the supply will eventually increase to around 80 to 90 per cent of the plant’s natural gas needs.

“Having a long-term agreement in place to support our Medicine Hat facility underpins a competitive cost position for years to come,” said John Floren, President and CEO of Methanex, in the release.

“We are delighted to have entered into this agreement with Painted Pony, a company with a very competitive cost position in the prolific Montney play in Western Canada. This agreement, combined with the 2015 refurbishment of our Medicine Hat plant, solidifies the long-term future of Methanex’s methanol operation in Canada.”

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Methanex is based out of Vancouver, and is the worlds largest producer and supplier of methanol to major international markets. Painted Pony is based out of Calgary, and operates in northeastern British Columbia.