Gas deal's $860m boost to NZ economy

A decade-long gas supply agreement between Todd Energy and methanol manufacturer Methanex New Zealand is set to inject $860 million into the national economy.

Todd Energy's Mangahewa field in North Taranaki will supply the bulk Methanex's mothballed plant north of New Plymouth for the next 10 years from July.

The deal will need major expansion of Todd Energy's McKee plant, and may see up to 25 new gas wells.

"The appraisal and development of the Mangahewa field is an exciting prospect that we expect will have positive implications for the regional economy and the wider national interest," Todd chief executive Jon Young said in a statement.

"We recognise that there is still a lot of work to be completed ion field appraisal and development to support this agreement."

Todd is discussing the project with landowners, hapu, local government bodies and other community groups.

Petroleum Exploration and Production Association of New Zealand chief executive David Robinson said the cash injection will make a "real difference" to the Taranaki economy, "creating genuine long-term jobs and generating export earnings on a significant scale.

Robinson said he expects Todd's "excellent track record" for safety and environmental performance will continue at the expanded operations.