History of New Zealand's gas sector

The modern age of natural gas supply in New Zealand began in 1970, when the Kapuni gas field, discovered in 1959, was brought on stream. Cleaner burning gas from the field was used to replace aging coal-based manufactured gas plants that had been serving New Zealand communities since the 1860s.

The discovery of the substantially larger Maui gas field off the coast of Taranaki in 1969 saw major pipeline system expansion and enabled natural gas to be more widely available throughout the North Island.

Maui’s gas reserves were very large, even by world standards. This gas was bought to market in 1979, and spurred development of other large energy projects, including several gas- fired electricity generation stations, an ammonia-urea plant at Kapuni, a chemical-grade methanol plant at Waitara, and a large gas-to-gasoline (synthetic petrol) plant at Motunui. The synthetic petrol plant converted natural gas firstly into methanol, and then into petrol. It now produces methanol only and, with the Waitara methanol plant, is part of the New Zealand methanol production assets of Methanex. Maui gas dominated the New Zealand market until 2007, when the Pohokura field reached full-scale production. A major reserve downgrade of Maui in 2002-3 contributed to a number of rapid changes within the New Zealand gas industry.

  • The government made significant moves to attract further investment in New Zealand gas exploration and production.
  • New gas finds were made in and around Taranaki to add diversity to New Zealand’s gas supply.
  • These new fields diluted the producer concentration of the past and brought more competition to the gas market.
  • A co-regulatory governance model was developed for the increasingly complex downstream gas industry. Policy initiatives are developed by the industry body, the Gas Industry Company through a consultative process and submitted for approval to the Minister of Energy and Resources.
  • Open access to the Maui pipeline was made available.
  • Governance rules and regulations of the downstream gas sector were developed to maintain efficient and competitive markets.
  • New Zealand’s first gas storage facility was commissioned in 2011 at the depleted Ahuroa field.

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