New Zealand Advances LNG Import Terminal, Shortlists Final Bidders

New Zealand has narrowed the field of bidders for a proposed LNG import terminal as officials move forward with plans to strengthen energy security and support future power demand.

(Reuters) — New Zealand said on June 9 it had shortlisted two providers for a proposed liquefied natural gas import terminal, a key part of government plans to shore up power supplies during dry years as domestic gas production declines and energy prices rise.

Energy Minister Simeon Brown said the government intended to move the two bidders to a request-for-proposal stage and sign a contract with a preferred provider later this year, with the facility expected to begin operating in 2028.

The government has not publicly named the two shortlisted bidders.

Rising energy costs in New Zealand for both businesses and households have been a drag on the economy and pushed up inflation, both key issues ahead of the country's November election.

The centre-right government says the terminal would provide backup fuel for power generation when hydro lake levels are low and wind and solar output is weak, helping avoid supply shortages and sharp wholesale price spikes.

Brown said the government was still working through how the project would be funded, including talks with major power companies, but said it would not be paid for through a levy on household electricity bills.

The LNG project sits alongside broader changes to the electricity market aimed at forcing generators and large power users to plan earlier for winter shortfalls.

The Ministry of Business, Innovation and Employment on June 8 opened consultation on a new Winter Energy Reliability Obligation, which would require major electricity buyers to secure backup supply ahead of forecast dry winters and require generators to show they have firm fuel available if hydro storage runs low.