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Energy Minister Simon Watts announced in a statement on Monday that the government has shortlisted “leading proposals and is progressing to commercial contracting, with the aim of signing a contract by mid-2026.”
The facility could be operational as soon as 2027 or early 2028.
“New Zealand is experiencing a renewable electricity boom, but a rapidly declining gas supply has left our electricity sector exposed during dry years, when our hydro lakes run low,” Watts said.
“The result is greater reliance on coal and diesel, and ultimately higher electricity prices, putting more financial pressure on families and making businesses less competitive,” he said.
He said establishing an LNG import facility is an “important next step.”
The LNG import facility will provide a reliable backup fuel source, reducing the impact of dry-year risk on electricity pricing and stabilising electricity costs.
It will also add another layer of resilience by giving New Zealand access to additional supply options if domestic gas supply tightens unexpectedly.
“Just having a reliable back up is expected to save Kiwis around NZ$265 million per annum by reducing price spikes and lowering the risk premium built into power bills that exist because of supply challenges, equivalent to around $50 per annum per household,” Watts said.
“If domestic gas supply continues to decline and drive-up gas prices, the availability of LNG is estimated to be worth NZ$1.2 billion ($723 million) per annum to the New Zealand economy by 2035. Access to LNG is also expected to protect around 2000 jobs from the economic impact of rising energy prices and gas shortages,” he said.
Further details in coming months
“Located in the Taranaki, the project will create jobs during construction and provide long-term skilled roles once operational, reinforcing the region’s role at the heart of New Zealand’s energy system,” Watts said.
Access to LNG will support many gas-dependent industries to consider their long-term energy needs and invest accordingly, by reducing the risk of supply disruptions and extreme price volatility.
According to the minister, the government will design an import model that brings LNG in large shipments and only when needed, minimising exposure to international gas prices and keeping the door open for new technologies.
Further details on the procurement process and project milestones will be shared in the coming months, the statement said.
FSRU, FSU options
In 2024, 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.
The government announced last year that it plans to launch a formal procurement process for an LNG import facility, as the country’s energy system is facing a fuel shortage, brought about in part through a faster-than-expected decline in domestic natural gas reserves.
The Ministry of Business, Innovation and Employment (MBIE), on behalf of the New Zealand government, released a registration of interest (ROI) and a project information memorandum (PIM) for LNG import facility services in October 2025.
MBIE’s LNG Project Team said at the time that “it may be that the best solution to deploy is an FSRU, or it might be that an FSU with onshore regasification facilities is best.”
LNG Prime contacted MBIE’s LNG Project Team to provide an update on the LNG infrastructure options and to comment on LNG supplies to the planned facility.
“The details of the proposals that have been received and are being considered will not be discussed as they are commercially sensitive, but they cover a range of possible approaches to supplying LNG facility services,” they said.
“Supply of LNG will be dealt with through a separate process,” MBIE’s LNG Project Team said.
