Decision looms for gas fund projects as demand outstrips available funding

Thursday, 2 July 2026

The government’s co-investment Gas Security Fund will partner with gas exploration and storage proposals. (File photo)

Government ministers will soon decide which projects will receive funding from the $200 million Gas Security Fund, which was set up last year to encourage gas exploration and storage projects.

Eleven proposals have been accepted for consideration, with applications exceeding the amount of money available. Details of the individual proposals have not been released.

The update marks the first indication of industry interest in the co-investment fund the Government announced late last year in response to declining domestic gas production from New Zealand's gas fields.

In an email response to questions about the fund, Brent Chalmers, of regional economic development and investment unit Kānoa, said their officials were working through the technical and commercial aspects of the proposals and “engaging” with the Gas Advisory Panel and relevant government agencies.

“We expect to submit advice to ministers for decisions on several proposals in July,” he said.

The Gas Advisory Panel was appointed earlier this year to provide independent technical and commercial advice on applications before recommendations were made to ministers.

The fund offers support for both gas exploration and storage projects.

It is chaired by former Gas Industry Company chief executive Andy Knight and includes geophysicist Tim Allan and former Gas Industry Company external relations manager John Pagani.

The fund was pitched as a way to partner with the private sector to bring more natural gas to the market and expand the country's gas storage capabilities and followed a law change which rescinded an offshore oil and gas exploration ban.

It opened for expressions of interest in January.

Details of the individual proposals were not released but the Government was expected to make a decision on them next month. (File photo)

When announcing the fund, Minister for Resources Shane Jones said natural gas remained an important part of New Zealand's energy system while the country transitioned towards greater use of renewable electricity.

But Labour energy and resources spokesperson Megan Woods argued public money should be instead directed towards reducing the country’s reliance on gas through alternative fuels and help businesses transition to cleaner energy.

The fund is not the only step the coalition Government is taking to increase gas supply. It is also considering two proposals to build an LNG import facility at Port Taranaki in New Plymouth.

The moves come as the gas supply in the country dwindles with the Austrian owners of the Maui A platform off the Taranaki coast informing the Government they expected to cease production at the end of this year.

In May, Methanex chief executive Rich Sumner told analysts the company would need to close its last remaining Taranaki plant at Motunui if OMV followed through with plans to shut the Māui field.

“If that happens, we would no longer be capable of running our plant,” he said.