PM says he’ll make final call on LNG terminal, Energy Minister suggests not much has changed

Monday, 30 March 2026

Energy Minister Simon Watts says the Government’s decision-making framework for an investment in an LNG import facility has not changed, amid speculation some colleagues may be wavering in their support for the initiative.

Watts announced last month that the Government planned to spend about $2 billion over 15 years on a terminal to import LNG, with the outlay recovered through a levy on electricity.

However, the price of LNG has since risen in some markets in the wake of the conflict in the Middle East, roughly doubling in Asia.

Prime Minister Christopher Luxon told Newstalk ZB this morning that he would make the final decision on the investment in the import terminal, based on whether the business case stacked up.

Read more:

• Government sticking by LNG plan in wake of Middle East conflict

• Inside Cabinet’s case for importing LNG ‒ and the puzzles that remain

• Dry year power shortages may need LNG but could it be cheaper?

Watts told The Post the Government agreed to proceed with delivering an LNG import facility to mitigate the “acute dry year risks and enhance security of energy supply”.

“Cabinet has authorised a designated group of ministers to make final decisions,” he said.

In February, the Cabinet agreed to authorise Watts to approve a shortlist of bidders to provide the import terminal, with himself, Finance Minister Nicola Willis and Infrastructure Minister Chris Bishop tasked with making “final decisions on the selection of a preferred provider”.

Watts indicated last week that he saw little reason to revisit the proposed investment case, given the supply of domestic gas is expected to continue to decline sharply.

Without imported LNG, the price of domestic gas could cause “significant economic destruction”, he said. “The counterfactual to LNG is not ‘continuing as we are’.”

About 3% of global LNG production is believed to have been knocked offline for up to five years as a result of an Iranian attack on Qatar’s Ras Laffan production facility on March 18.

Watts said last week that while the short-term outlook for LNG was “subject to change” as a result of the Middle East conflict, production in the medium to long term was still expected to increase as a result of new production coming online.

Forecasts produced by the International Energy Agency late last year suggested global LNG production would increase by about 50% by 2030, he noted.

The IEA predicted about half of that extra production would come from the United States and about 20% from Qatar, with the biggest slice of the remainder coming from Canada.

“There are a wide range of non-Middle East sources for New Zealand to import LNG,” Watts said. Options included the US, Australia, Canada, Malaysia and Indonesia, he said.