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Last year, New Zealand’s government revealed plans to start importing LNG, with options including the former Marsden Point oil refinery, the Port of Taranaki, and an offshore option.
Energy Minister Simon Watts and Finance Minister Nicola Willis announced on Wednesday that the New Zealand government has assured the power companies in which it is a majority shareholder that capital is available to support investment in “critical” electricity infrastructure.
Moreover, the government’s energy package focuses on investing in security of supply and building better markets to improve affordability.
It includes launching a formal procurement process for an LNG import facility.
According to the document, New Zealand’s energy system is facing a fuel shortage, brought about in part through a faster-than-expected decline in domestic natural gas reserves.
This decline is impacting New Zealand’s highly renewable electricity system which relies on gas as a source of energy when renewable generation cannot meet demand.
Broader energy users are also affected by the decline in gas production.
“The New Zealand government understands the potential for LNG to play a part in ensuring that the country can access secure and reliable energy,” the document said.
Procurement process
As part of this, the government is commencing a procurement process for LNG import facility services (including the provision of services for LNG storage, LNG regasification, send-out and delivery of natural gas to the gas transmission system, etc.).
The government noted that LNG commodity procurement will be managed through a separate process.
The first phase of the LNG import facility services procurement process will be a registration of interest (ROI).
The ROI invites registrations of interest from potential suppliers of LNG infrastructure.
It will also invite specific proposals from companies / consortia that could deliver an LNG import facility for winter 2027.
The government did not provide further details regarding the facility, but this could mean that New Zealand may host a chartered FSRU in the future to facilitate LNG imports.
Details of what is required from such a facility will be set out in the ROI, the government said.
At the same time, alternative (non-LNG) ways of managing New Zealand’s dry year risk will be considered and analysed.
“This will support a decision on whether (or not) to proceed with the next stage of procuring LNG infrastructure, to be made in December,” the government said.
The government plans to release ROI documentation and a project information memorandum (PIM) on October 6 on its electronic tenders service (GETS) website.
This will provide the background material and details of how companies should prepare and submit their registration.
Port Taranaki
The Port of Taranaki welcomed the government announcement in a separate statement on Monday, saying that this is an “encouraging development as solutions are needed quickly to shore up New Zealand’s gas supply to ensure energy security, resilience and affordability.”
With a project delivery deadline of winter 2027, Port Taranaki is the “right location” for an LNG import facility.
“Port Taranaki is in a strong position to quickly and efficiently support the development of a small-scale, low-cost LNG project or a larger facility that would meet future energy demand needs,” the port said.
The port said that it would not lodge a registration of interest as a potential supplier of LNG infrastructure.
“However, we’ve been talking with potential developers and are ready and willing to work with them, government, investors, and the industry on solutions to help realize LNG imports – offering our capabilities around marine services, port services, infrastructure, and land,” it said.
