Energy giants find gas imports viable

By CHRIS DANIELS

New Zealand is a step closer to importing natural gas.

Power giants Contact and Genesis yesterday unveiled the results of a year-long study into shipping liquefied natural gas to this country to produce electricity in power stations.

"The study that we have undertaken reaches the main conclusion that LNG is a feasible and practical alternative," said Contact chief executive Stephen Barrett.

Genesis chief executive Murray Jackson said importing LNG would also be economic.

The study was led by US engineering and energy giant Kellogg Brown and Root.

About 25 per cent of electricity is generated at power stations fuelled by natural gas. The Maui gas field has supplied two-thirds of the gas market but is running out.

As demand for electricity surges, generators need to be sure of fuel supplies.

State-owned Genesis and public company Contact are also exploring for natural gas.

They said long-term planning must start early because of the time needed for resource consents and building infrastructure.

The fear is of running out of fuel by decade's end.

The Contact-Genesis report looks at importing 50 to 60 petajoules of gas a year - or about half of this country's gas requirements beyond 2010.

The companies expect the price of LNG to be similar to that now spent on gas coming from new fields.

A new LNG terminal would cost between $550 million and $600 million to build, a job that could take up to three years to complete, once resource consent and gas supply contracts had been signed.

To avoid the plant being left "stranded" by the discovery of local gas fields, Contact and Genesis would sign long-term gas supply contracts before building a terminal.

The next two years will be spent selecting a site - either Marsden Point or Taranaki - for an LNG terminal, which could be operational by 2010.