New Zealand venture defers plan to import LNG
WELLINGTON, July 2 (Reuters) - New Zealand's largest listed power company, Contact Energy (CEN.NZ), and state-owned Genesis Energy have deferred a plan to import liquefied natural gas (LNG), Genesis said on Thursday.
An improvement in the local supply of gas for the next decade meant the decision on whether to apply for permission to build a gas storage and conversion facility, originally expected to cost around $384 million, was pushed back by a number of years, Genesis Public Affairs Manager Richard Gordon said.
"The short term gas supply has improved, and that takes the pressure off from where we were a couple of years ago," Gordon said. But, he added, "Our view is that we are likely to need to import LNG at some stage".
When the project joint venture, known as Gasbridge, was first set up, it was thought New Zealand might need to import gas to supplement the local supply by 2012, a date which has now been pushed back to around 2018, Gordon said.
The ageing Maui field, which supplies the bulk of New Zealand's gas, is not declining as fast as originally thought, while new but smaller fields such as Pohokura, Kupe and Turangi are coming into production.
When Gasbridge first nominated the port of New Plymouth, on the west coast of New Zealand's North Island, as its preferred site for an LNG import and storage facility in late 2006, it was estimated a land-based terminal would cost about NZ$600 million.
Due to advances in design and technology, building and operating an offshore terminal could be done in about half the time and at about half the cost, Gordon said. However building a land-based terminal has not been ruled out.
About a quarter of New Zealand's electricity is generated from gas-fired stations, the bulk of which are operated by Contact and Genesis, with around 60 percent of power coming from hydro stations. Contact and Genesis are the second and third largest electricity companies in New Zealand in terms of generation capacity, behind state-owned Meridian Energy. ($1=NZ$1.56) (Reporting by Adrian Bathgate; Editing by Mark Bendeich)
