Importing of LNG moves a step closer

By PAULA OLIVER

The country's two largest gas users have moved a step closer to deciding whether to begin importing liquefied natural gas to plug a looming gap in the country's energy supply.

Contact Energy and state-owned generator Genesis Power yesterday appointed two international advisers to study the cost, logistics and market implications of importing LNG.

Contact and Genesis first joined forces to investigate LNG in October, and made the prediction that New Zealand could be facing an energy gap in as little as four or six years.

With the Maui gasfield winding down and only smaller new gasfields being developed, there is concern about how the country's growing demand for electricity will be met.

Yesterday Contact and Genesis said they had appointed Kellogg Brown & Root, the engineering and construction subsidiary of American oil company Halliburton, to study the feasibility of an LNG terminal in New Zealand.

The terminal would need to be able to receive LNG from a ship, provide re-gasification facilities to turn the liquid back into gas, have appropriate storage tanks, and provide a way to pipe the gas into existing pipelines.

LNG is made by removing certain elements of natural gas and cooling the natural gas to about minus 160C.

It is transported around the globe by ship, and although it has been considered an expensive form of energy demand for it is growing in some large countries.

A second international adviser, Poten & Partners, will advise Contact and Genesis on how the LNG could be integrated with existing and future gas supplies.

Poten & Partners will advise on the ideal capacity for a terminal in New Zealand, storage needs, and what kind of shipping and procurement plans would be needed to ensure an ongoing supply.

Local companies have also been engaged by Contact and Genesis to consider potential sites for a terminal, taking into consideration the necessary environmental and consent issues.

It is hoped that the study will be completed by the middle of this year.