New Zealand announced on Tuesday that it had selected 'two' providers for the proposed liquefied gas import facility. The terminal is a major part of government plans to ensure power supplies during the dry years, as domestic gas production decreases and energy costs rise.
Energy Minister Simeon brown said that the government intends to move the two bidding companies to the request-for proposal stage and then sign a contract later this year with a preferred supplier. The facility is expected to start operating in 2028.
The two shortlisted bidders have not been publicly announced by the government.
The rising cost of energy in New Zealand has been a drag for the economy, and inflation has risen. These are both key issues before the November election.
The government's 'centre-right' says that the terminal will provide a backup fuel source for electricity generation when wind and solar power output are weak and hydro lake levels low. This would help avoid wholesale price spikes and supply shortages.
Brown said that the government is still working out how to fund the project, including discussions with major power companies. However, he said it wouldn't be paid for through a charge on household electric bills.
The LNG project is part of broader changes in the electricity market that are aimed at forcing large power users and generators to plan earlier for winter shortages.
The Ministry of Business, Innovation and Employment opened a consultation on Monday on a new Winter Energy Reliability obligation, which would require major electricity buyers to secure backup supplies 'ahead of forecasted dry winters, and generators to demonstrate they have firm fuel on hand if hydro-storage runs out.
(Source: Reuters)