Support for imported gas tipped to feature in energy reforms

Tuesday, 30 September 2025

Food and electricity costs are climbing again, with dairy prices soaring. The government has announced changes to the Commerce Act to stop mergers and pricing tactics it says hurt competition.

The Government is expected to signal its willingness to advance funding for an LNG import terminal at Port of Taranaki, as a centrepiece of energy reforms expected to be announced tomorrow.

A regulatory shake-up to put a sharper focus on the security of electricity supplies is also expected to feature.

But The Post understands Energy Minister Simon Watts will confirm the Government has limited appetite for more many major market interventions, when he releases a long-awaited report it commissioned from Frontier Economics into the sector, along with its response to the British consultant’s findings.

It is understood an application has been made for public funding to help pay for an upgrade at the Port of Taranaki that would allow it to receive imported LNG.

The Government signalled last year that it was prepared to help facilitate imports of LNG to help alleviate a gas shortage caused by dwindling supplies of natural gas that contributed to a broader energy crunch last winter.

At the time, then energy minister Simeon Brown said he expected a terminal would be in place by 2026 at the latest and that imported LNG would help support electricity generation.

However, it was not clear public money would be available and progress on the initiative afterwards appeared to stall.

LNG imports may be back on, with some form of financial support from the Government, possibly in the form of a capital advance, expected.

Contact Energy chief executive Mike Fuge told The Post there was a “fit for purpose” proposal that would see a small-scale LNG terminal established using a converted drilling rig that would be jacked up at the Port of Taranaki and that would be connected to the Maui gas pipeline.

“The Ministry of Business, Innovation and Employment has been coordinating it, but we have been actively involved.”

Power companies said in July that they had estimated an import terminal would cost between $140 million and $295m, but they warned that while an investment was technically feasible, support from the Government would be required.

A source suggested that support could come in the form of a capital advance from the Government.

Electricity generators that burn gas to produce electricity had not reached an agreement on funding the facility themselves and its specialised design meant it was unlikely to be commissioned before 2029 or 2030, Fuge said.

“That's the reality of building stuff in this country. We are not Germany.”

The Council of Trade Unions today called for the Government to reinvest the dividends it received from Meridian Energy, Mercury and Genesis into buying back the 49% of the shares in the three companies that they did not already own and switching their focus away from maximising profits.

However, the Government is not expected to attempt to unwind the Bradford market reforms that shaped the current electricity market in the 1990s, and the CTU’s proposal received a guarded response from Labour energy spokesperson Megan Woods.

Labour has not yet released the energy policy it will take to the electorate next year, but commenting on the Government’s pending announcement Woods said more was needed than “tinkering around with the status quo”.

“What New Zealanders need and deserve is vision, courage and leadership to deliver an energy system that is affordable,” she said.

“This is vital to protecting jobs and industries and allowing people to healthily heat their homes.”