New Defence Force Navy tanker to cost $493 million

The new vessel will be built by South Korean company Hyundai Heavy Industries. Photo / Supplied

The Government is to buy a $493 million naval tanker which will be custom-made for use in the Antarctic.

Defence Minister Gerry Brownlee said the tanker will replace the 30-year-old HMNZS Endeavour which is used to refuel naval vessels and helicopters at sea and to supply fuel and fresh water.

The new vessel will be built by South Korean company Hyundai Heavy Industries and was expected for delivery in 2020. It will be ice-strengthened and adapted to cope with extreme winter conditions so it could deliver fuel and supplies to Scott Base and McMurdo Station during the summer months - something HMNZS Endeavour could not do.

An indicative image of the new Navy tanker that will replace the 30-year-old HMNZS Endeavour. Photo / Supplied

"It is important that New Zealand has a significant asset capable of supporting our presence in the Antarctic and our interests in the Southern Ocean more generally," Brownlee said.

He said the investment would help show New Zealand's long-term commitment to its joint work in the Antarctic with the United States. The recent White Paper on Defence put a greater emphasis on the Southern Ocean and Antarctic than in the past.

The replacement tanker will be much larger than HMNZS Endeavour, which is due to retire in 2018. It will be able to refuel two ships at once, carry and refuel helicopters, produce and store fresh water and transport bulk goods.

Labour's Defence spokesman Phil Goff said the price tag of almost $500 million was the same as for all seven vessels purchased in the early 2000s under Project Protector, for a single multi-role HMNZS Canterbury, two offshore patrol vessels, and four inshore patrol vessels.

An indicative image of the new Navy tanker. Photo / Supplied

However, he said HMNZS Endeavour was due for replacement. "Is the tanker required? Absolutely. It's been on the books for some time and the naval fleet requires it."

He was not concerned it would be made overseas.

"I don't know if there were New Zealand tenderers for it, but the prospects of building a ship that size in New Zealand -- I don't think the New Zealand industry would have the structure and the competitiveness to do it here."

He said some components of the Project Protector builds were done in New Zealand but it was important to get the best value for money.