New Zealand firms choose preferred LNG site

Oct. 5, 2006
New Zealand companies Genesis Energy Ltd. and Contact Energy Ltd. have chosen Port Taranaki on the west coast of the country's North Island as the preferred site for LNG imports if local exploration fails to find sufficient indigenous natural gas reserves by the end of this decade.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Oct. 5 -- New Zealand companies Genesis Energy Ltd. and Contact Energy Ltd. have chosen Port Taranaki on the west coast of the country's North Island as the preferred site for LNG imports if local exploration fails to find sufficient indigenous natural gas reserves by the end of this decade.

The companies say the selection revolves on preserving future options. They will now begin to obtain all the necessary resource approvals for possible construction of a terminal.

Port Taranaki was selected ahead of Marsden Point on the east side of North Island (and site of New Zealand's only refinery) because the Taranaki region has vast experience in handling gas. It also has a good deepwater port and existing gas distribution infrastructure.

The terminal proposal includes a new purpose-built berth and a reception storage tank to be constructed at Contact Energy's New Plymouth electric power station.

Both companies prefer to use domestic gas, but the announcement of an LNG reception site is prudent commercial risk management.

The LNG project could cost $500 million (NZ). They estimate importation of 50-60 petajoules/year of LNG—about half the country's annual gas usage. About 12-14 shipments would be required.

A decision to import LNG will be deferred until 2008-09, and imports would not begin until 2010-13.