By CHRIS DANIELS energy writer
Owners of the Pohokura natural gas field off Taranaki have been given final approval to jointly sell the gas, despite it being potentially anti-competitive.
The Commerce Commission said yesterday that it had given final approval to the application by Pohokura owners Shell, Todd Energy and European oil
and gas giant OMV to join forces and sell the gas together.
Although not as big as the depleting Maui field, the Pohokura field is seen as the vital next source of natural gas for the gas-fired electricity-generating stations owned by Contact Energy and state-owned enterprise Genesis.
Agitation has been growing in the energy sector to bring Pohokura into production as soon as possible.
But the field's development has been held up by the contested desire of its owners to jointly market the gas.
Gas buyers say there should be a competitive market for gas, so the price should not be kept artificially high by the owners fixing prices.
New Zealand law prohibits competitors agreeing to work together in a way that reduces competition unless it is authorised as providing greater public benefit.
The acting chairwoman of the commission, Paula Rebstock, said the decision to authorise the arrangement "reflects the fact that in certain circumstances, the development of gas fields may require a joint venture approach in order to make the gas available to the market as quickly as possible".
Rebstock said the commission accepted that in this case, the joint marketing plan "may result in the earlier development" of the field, and early development had benefits to the New Zealand public.
This earlier development would bring benefits that fell within the range of $47.8 million to $81.9 million, she said.
The commission imposed three conditions on the plan.
These are that the three Pohokura owners can jointly market the gas after June 30, 2006, only if the field is fully operational by then, that any of the three wanting to sell their share must get commission approval first, and that no restrictions be put on gas buyers from then reselling it to third parties.
