Tasmania tantalises NZ firms

By CHRIS DANIELS energy writer

New Zealand companies look set to be the first businesses to start making money from bringing natural gas to Tasmanian industry.

Wanganui Gas is asking the Tasmanian Government for permission to sell gas in the state, joining the growing number of New Zealand energy companies spreading their wings across the Tasman.

The gas supplier is 75 per cent owned by the Wanganui District Council, with NGC holding the rest.

Wanganui Gas sells to big Auckland industrial and commercial customers, also supplying Mercury Energy, which sells gas under its own name.

The company is in Tasmania thanks to the work of its neighbour, New Plymouth lines company Powerco, which recently signed a memorandum of understanding with the Tasmanian Government.

This agreement is designed to let Powerco begin laying a natural gas distribution network that will for the first time allow Tasmanian homes and businesses to use natural gas pumped across Bass Strait from Victoria.

A long-running and often bitter political debate has raged in the state over delays in the construction of a natural gas network to supply households and industry.

Wanganui Gas chief executive Trevor Goodwin said the company had been watching developments in Tasmania for some time.

It had formed an Australian company and, if successful in its licence, would sell gas under the name Direct Energy Tasmania.

It hopes its first customer will be a meat plant at Longford, near the city of Launceston.

Goodwin said Wanganui Gas hoped to start supplying gas next month along pipes expected to be built by Powerco.

Powerco's board has yet to commit to the Tasmanian project, as the company needs to secure commitments from enough customers before investing the money in building a network.

While the two New Zealand companies have been working together, the Tasmanian system that Powerco hopes to build will have full retail contestability, meaning it cannot give special treatment to Wanganui Gas.

But it is the only company so far to have applied for a licence to sell gas.

Big industrial users would be the first to have gas piped to them.

The network will be extended to households later.

Wanganui Gas had operating revenue in the year to last July of $10.2 million and a tax-paid profit of $1.3 million.

It sells gas to 16,000 industrial, commercial and residential customers, including all the Goodman Fielder sites, and Sky City in Auckland.