NZ green lights LNG import facility

WHILE Australian end-users have yet to throw their weight behind several proposed LNG import projects in southern and eastern ports, the New Zealand government has shortlisted two facilities it says will assure the nation’s energy supply.

With New Zealand’s offshore gas fields approaching exhaustion energy minister Simeon Brown says renewables are booming under the Electrify NZ reforms with record levels of renewable generation and new wind, geothermal, and battery projects coming online.

“However, no renewable alternative can cover the weeks or months needed to back up our power system by 2028, when the next dry year could arrive. Kiwis need a backup source of power when the wind isn't blowing, the sun isn't shining, and the lakes are low,” Mr Brown said.

“You can't run an energy system on weather forecasts, and without firm, flexible energy to back up our renewables, the next dry year will bring higher power bills, potential factory closures and job losses, and rolling blackouts across the country.

"An LNG import facility is the fastest and most affordable way to cover the dry-year gap, keep the lights on, and protect thousands of Kiwi jobs. Every other comparable country in the OECD either has access to abundant natural gas or access to gas imports. New Zealand is an outlier, and it is time we caught up.”

The minister said "Recent events in the Middle East are a timely reminder that New Zealand needs secure, diversified fuel supplies. Despite the conflict, LNG remains the fastest, cheapest, and most flexible dry-year solution that can be put in place this decade. Delivering LNG takes coordination that only Government can provide, and we are providing it.”

The two shortlisted import projects are located at Port Taranaki – from which gas exports now originate - and the port company says it is ready to support their establishment.

“An LNG import facility will be a critical asset for New Zealand’s ongoing energy security and resilience, while the availability of LNG fuel for firming will also support the build-out of more renewable generation projects, allowing the time and space for these projects to progress,” Port Taranaki chief executive Simon Craddock said.

“We’re pleased the two shortlisted projects both utilise Port Taranaki, with our access to gas transmission pipelines, our energy infrastructure and facilities, decades of experience supporting the energy sector, and our experience and skills in handling oil and gas products. Regionally, there is deep knowledge and understanding of the energy industry here, and a world-class skillbase that can be tapped into and utilised.”

Mr Craddock said while MBIE continued with the procurement process, Port Taranaki was not in a position to comment further on where in the port the proposals were located or whether infrastructural upgrades would be required and possible costs, but safety would be central to a project proceeding.

“The shipping, storage and transfer of petrochemicals at Port Taranaki, such as LPG, methanol, road fuel, crude and condensate, always follows strict safety procedures and adheres to international safety protocols,” he said.

“Before we support a particular concept for an LNG facility at Port Taranaki, we will require assurances from appropriately qualified environmental and safety experts and regulators that it will meet all applicable safety and environmental standards.

“We will also put environmental impact analysis, and safety cases covering hazard analysis, prevention, and emergency response, under scrutiny.”

Indicative of the change in gas flows, the Port Taranaki-based Liquigas on-site depot has flipped from LPG exports to receiving an import shipment every week from Australia. The depot holds about 1,000 tonnes and the company expects to have to expand capacity to receive more frequent shipments.