New Zealand is set to begin importing liquefied natural gas (LNG) by 2027 or early 2028, following the government’s announcement of a plan to construct an LNG import terminal in Taranaki. This region is central to the country’s gas industry. The project, estimated to cost over $NZ1 billion ($A860 million), is expected to create a new market for LNG exporters in Australia and Papua New Guinea, the closest potential suppliers.
Energy Minister Simon Watts stated that the project would be funded through a levy across the electricity sector, ranging from $NZ2 to $NZ4 per megawatt-hour. He anticipates benefits of at least $NZ10 per MWh, reducing power spikes and improving winter power supply reliability. This initiative is projected to yield a net benefit for consumers of approximately $NZ265 million annually, which is about $NZ50 per household.
Prime Minister Christopher Luxon attributed the necessity for LNG imports to the previous government’s policies, including the ban on new oil and gas exploration and the 2030 renewable energy target. These policies, he argued, contributed to increased power costs in New Zealand, particularly during a dry year that affected hydropower generation, leading to greater reliance on coal and diesel.
Watts explained that LNG will ensure consistent power supply as New Zealand expands its renewable energy generation capabilities. This decision contrasts with Australia, a major LNG exporter, where private sector-led proposals for LNG import terminals in Victoria and NSW are contingent on securing customer commitments.
