PNG extends cost cut offer to Methanex PACIFIC NORTHERN GA. (PNG) has offered Mitnanex a reduction in the cost of transporting na- tural gas to its Kitimat methanol plant in return for a long term contract. The offer amounts to a 55 per cent reduction of ‘what Methanex would normally pay. It follows a Methanex original plan seeking cost cuts’ inorder to re-open its plant which closed in July for at least a year. -Methanex: also wants the provincial government to lower the amount of royalties it receives from the sale of natural gas and a break in property taxes for its Kitimat plant from the District of Kitimat, To compensate, Metha- nex is promising to pay PNG 40 per cent of the po- tential profits and the gov- ernments 20 per cent in times when methanol prices rises. Al risk is several hun- dred jobs and millions of dollars in payroll, pur- chases and taxes should Methanex not re-open the Kitimat plant. PNG vice president Greg Weeres said his company’s offer of a lower transportation fee through its pipeline from north- . eastern gas fields amounts | to only 6.5 per cent of Me- ‘ thanex’s methanol praduc- tion costs. He said Methanex’s lar- gest challenge remains what it pays for natural gas in the first place as it-is the company’s largest cost. “We have no control aver that commodity price,” said Weeres. Methanex, as is the case with other natural gas users, has faced ever-in- creasing price increases driven i American, de- ate word ‘from Methatiex on PNG’s counter offer. Methanex has already said it will commit to run- ning its Kitimat methanol plant until at least 2009 if it got the cost reductions it wanted. Weeres was hesitant to say if PNG’s definition of a long term contract mat- ches Methanex’s commit- ment to run the plant until 2009. _ “A long term contract would give us security and the stability of a custo- — met,” said Weeres. PNG has already cut operating casts and will trim capital expenditures in case it loses Methanex which provides 40 per cent of the company’s income. That's resulted in lay- offs, three of which took place in PNG’s Terrace of- fice. Weeres said PNG will ask for a rate increase in September in what it charges its residential and ather industrial customers to transport natural gas through its pipelines. That stems from the company's need to make up for any lost income from Methanex should its plant stay closed or if it pays less for gas transpor~ tation costs. “There will be an im- pact on our remaining cus- tomers, absolutely,” said Weeres. But he was reluctant to Sockeye boosted MORE SOCKEYE will be available to anglers along the Skeena from its mouth upstream to the Kispiox River.until Aug, 31. The recreational daily quota to four from two was increased in the wake of record Lake Babine sock- eye returns. A non-retenlion area, however, is still in effect around the mouth of the Kitwanga River. The quota increase also applies to most of the Babine River’s mainstem, say if those price increases will then represent an in- direct subsidy to Methanex because PNG will be char- ging it less. “I’m not sure it’s fair to say there will be a subsidy to Methanex if Methanex were {tO agree [le our proposal],” said Weeres, “We still need to file for a rate increase in Sep- tember and the transporta- tion toll is but one compo- nent of our rate application and we don’t yet know what those components will be,” he said, PNG’s rate application will go before the B.C. Utilities Commission, a provincial body which re- gulates natural gas trans- portation costs. m What is it? Sandy Sandhals found this welded object at an old Kitselas homestead a few months ago. it’s two feet long, seven and a half inches wide and almost a foot high. He couldn't quite figure out what it was — anyone have any idea? 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