Canada-based methanol producer and distributor Methanex has signed a natural gas prepayment agreement with GeoPark Holdings, as part of which it will provide $40 million in financing to support and accelerate GeoPark's natural gas exploration and development activities in the Fell Block in southern Chile.
Under the arrangement, GeoPark will also provide Methanex with natural gas supply sourced from the Fell Block under a 10-year supply agreement.
GeoPark has been increasing its gas supply to Methanex since 2006 and its goal is to provide up to 10% of Methanex’s total natural gas needs in Chile by the end of 2008.
Paul Schiodtz, Methanex’s senior vice president for Latin America, said: This prepayment agreement represents an important step to restore secure, long-term gas supply to our plants in Chile. We are delighted to be working closely with GeoPark who have been very successful both discovering new gas and investing in infrastructure to increase natural gas deliveries to our plants.