New Zealand to build LNG import facility for energy security
Simon Watts, New Zealand's Energy Minister, announced on Monday that the country has selected contractors to build an LNG import facility. The facility will bolster energy security and provide a reliable source of backup power, while also supporting economic growth.
By the middle of the year, the government hopes to sign a deal for an LNG import facility to be built in Taranaki on New Zealand's North Island. The facility would be ready in 2027 to receive LNG.
The model allows LNG to be imported only in large quantities and when required, thus limiting the exposure of global gas prices.
Watts stated that despite a boom in renewable energy generation, mainly hydropower, the declining 'gas supply' has left New Zealand’s power sector vulnerable during droughts, when 'water levels run low at lakes and dams.
Watts stated in a press release that "the result is greater dependence on coal and diesel and, ultimately, higher electricity prices. This puts more financial pressure on households and makes businesses less competitive."
The establishment of a LNG import facility is a crucial next step.
The centre-right government, elected in '2023, has been working to diversify the energy sources. It passed in 2025 a law that reopened the country to offshore oil and natural gas exploration. This lifted a ban placed by the previous centre left Labour-led government.
Watts stated that access to LNG would deliver an estimated NZ$1.2billion ($721.6m) in economic benefits annually by 2035. It could also help protect around 2,00 jobs from the effects of rising energy costs and gas shortages.
(source: Reuters)
