Gas scare just hot air, says Genesis

By CHRIS DANIELS

Dire warnings of natural gas shortages have been ridiculed by state-owned power company Genesis Energy.

Chief executive Murray Jackson said claims by private-sector rival Contact Energy that industrial gas supplies could be in jeopardy over the next few years were not borne out by the facts.

Contact Energy told the Business Herald this week that big gas users should start investigating alternative energy sources as backups to natural gas, since the country was entering a period of tightening supply.

The Maui gas field, which has supplied New Zealand with some of the cheapest natural gas in the world for 20 years, is starting to run down.

But Jackson is unconvinced, saying the Maui depletion provided no basis for Contact's warnings.

"I'm disappointed in them saying that, because I don't think the facts stack up to that. I don't believe that is the situation." he said.

"Genesis does not see a risk to small to medium-to-large industries in New Zealand, either commercial, household or industrial consumers."

Jackson outlined Genesis' demand and supply information, which showed an expected total demand of 55 petajoules of gas each year coming from industry, commercial and residential customers.

One petajoule of gas is the equivalent of 24,000 tonnes of oil.

New Zealand's total gas demand, which includes methanol maker Methanex and several gas-fired power stations, including Genesis' own Huntly station, was 190 petajoules a year.

"The available gas for commercial, industrial and residential customers is quite sound through to 2018," said Jackson. This assumed no new gas fields would be discovered. In the worst case, with no new gas being found, New Zealand could start importing liquefied natural gas.

Companies did not need to invest in new dual-energy systems.

"Don't go and spend millions of dollars converting back to coal firing. Coal is not a suitable application for small plants such as hospitals, dry-cleaning plants or bakeries," he said.

Jackson said it was possible that Contact Energy had its own concerns about gas, particularly if it had not secured enough post-Maui gas to run its Otahuhu B gas-fired power station.

Contact Energy last year shelved its plans for a new gas-fired power station which would sit alongside its existing Otahuhu plant, saying it could not secure contracts for enough gas.