LNG facility biggest Taranaki energy project in decades

Wednesday, 11 February 2026

Details about a new LNG terminal remain uncertain but a land-based facility at Port Taranaki is one option.

Details about a new liquefied natural gas terminal soon to be built in Taranaki remain uncertain, but it could become one of New Zealand’s largest energy projects in decades.

On Monday, Energy Minister Simon Watts announced a new liquefied natural gas (LNG) terminal would be built in Taranaki with construction expected to finish next year or early 2028.

The facility, which had been touted since 2006, would be paid through a levy on power bills and the Government said the terminal would save New Zealanders about $265 million a year or roughly $50 per household.

But Labour energy and resources spokesperson Megan Woods said the terminal would push costs onto households, increase reliance on overseas gas and slow investment in renewable energy.

New Plymouth MP David MacLeod says the facility will cost hundreds of millions of dollars, and is the largest energy project since the “Think Big” initiatives from the 1980s.

LNG was gas that had been cooled and turned into a liquid for transport, reducing its volume by about 600 times. To stay in this form, it had to be stored and transported at about -160C.

New Plymouth MP David MacLeod said the terminal was intended to shore up New Zealand’s energy supply after recent winters exposed vulnerability in the national grid.

“Two winters ago, industries had to turn off temporarily to provide both electricity and gas for New Zealand. LNG is the answer to that,” he said.

MacLeod said he still wanted there to be exploration of domestic gas but stressed the LNG plant was a strategic move and called it an “insurance policy” for the country’s supply.

MacLeod says an option for the terminal could include a land-based facility at Port Taranaki.

Despite the project’s potential scale, which MacLeod said would likely cost hundreds of millions of dollars and was the largest energy project since the “Think Big” initiatives in the 1980s, much about it was still unknown.

The Government said it would design an import model that would bring LNG in large shipments and only when needed, but the location, final design, construction costs and the number of long-term jobs remained uncertain.

The Ōmatā area has several gas and oil storage facilities near Port Taranaki.

MacLeod said the Government was still to secure what the actual project would be and there were a number of options being looked at with an announcement expected later this year.

Options could include a land-based facility at Port Taranaki, offshore moorings where ships unloaded at sea, or floating regasification ships to convert LNG back into gas before it entered pipelines for use, he said.

“I think, personally, that this is going to be more of a land-based facility to regasify because I think we’re going to have to store it as well.”

LNG import facilities were popular around the world and situated in Japan, South Korea, China, India and across a number of locations in Europe. They featured dome-shaped tanks, pipelines and port facilities.

MacLeod said he believed Taranaki was likely chosen for the project because of its existing oil and gas infrastructure, deep water port facilities and expertise in the petrochemical industry.

Labour Party energy spokesperson Megan Woods says importing LNG will push costs onto households, increase reliance on overseas gas and slow investment in renewable energy.

Port Taranaki chief executive Simon Craddock told RNZ the port’s advantages included the proximity to the Maui pipeline, which stretched to Auckland, and its experience handling petrochemical, such as the exports of methanol, gas and oil.

The port had been a proposed LNG terminal location in the past.

In 2006, it was approved for a $600m terminal to be built at the site before it was scrapped three years later by Contact and Genesis because an offshore floating option would be far more attractive and feasible.

In 2024, Craddock said the port could become an LNG hub within 18 months.

Meanwhile, Woods said in a written statement the project was “bad for New Zealand” because every household and business would be taxed to pay for a private company to store gas for commercial purposes.

“Importing more fossil fuels from overseas makes us more vulnerable to international gas prices, not more energy independent,” she said.

“Taxing electricity users only puts more costs on households and businesses. Let’s not forget this is the government that has driven away investment in offshore wind.”

She said more investment in renewable energy generation and storage was needed, not more dependence on fossil fuels.