Page 5 - GLNG Week 09 2021

GLNG COMMENTARY GLNG

New Zealand studies

LNG import feasibility

The official Gas Industry Co. (GIC) is seeking to

commission a study into the feasibility of importing

LNG to plug gaps in national supply

POLICY NEW Zealand has found itself in the awkward GIC was quick to downplay the import
position of studying the feasibility of importing review, noting that it was simply seeking to
WHAT: LNG just three years after imposing a morato- develop an energy supply model that could
The country’s production rium on new offshore exploration. inform energy security understanding.
is falling and it must Gas Industry Co. (GIC), an official body “It is in no way a step closer, it’s nothing to
prepare for a potential that works with the government on industry do with a live proposal. It’s a scenario-building
supply deficit. regulation, requested proposals this week for exercise,” a GIC spokesman told Stuff. “This is
a study into importing LNG to fill gaps in the just part of a broader study. We’ve gone out to
WHY: national energy system. The request is part of market this week for consultancies ... all we’ve
The government’s ban on a wider study into the gas market the New Zea- done is asked [experts] to do some modelling
new offshore investment land Energy Ministry had requested, with GIC around the security and certainty of gas supply.
has robbed investors expected to provide its Gas Market Settings This is very routine.”
of their appetite for the Investigation by the middle of the year. PEPANZ, however, was not convinced. CEO
upstream. News of the import study comes just weeks John Carnegie argued that relying on Austral-
after it emerged that major gas user Methanex ian LNG would likely drive up domestic energy
WHAT NEXT: had opted to shutter its plant at Waitara Val- prices while also leading to higher emissions
Dwindling gas supplies ley, owing to insufficient gas supply, and that connected to shipping.
could see Methanex exit developer New Zealand Oil and Gas (NZOG) He said: “It means we’d be funding the Aus-
the country. had walked away from its Clipper exploration tralian economic recovery instead of generating
permit. the jobs and royalties here in New Zealand. If
Industry group Petroleum Exploration we’re going to keep using natural gas until at
and Production Association of New Zealand least 2050 as the Climate Change Commission
(PEPANZ) described GIC’s investigation on acknowledges, surely it’s better to produce it
March 3 as “disappointing but unsurprising”, locally.”
before adding that importing LNG from Aus- Carnegie added: “Local natural gas producers The country’s
tralia would be “crazy when we have our own are investing in their assets to enhance supply in
local resources here”. the short and medium term, but beyond that we upstream
need new exploration and the right conditions potential
Supply stoush to encourage investment.”
The country’s upstream potential was severely was severely
limited by the government’s decision in April Upstream challenges
2018 to ban all new offshore exploration. The NZOG and Australian partner Beach Energy limited by the
island nation made the decision without consult- applied in February to relinquish petroleum
ing industry as part of its drive to reach net-zero exploration permit (PEP) 52717 (Clipper), government’s
carbon emissions by 2050. which contains the Barque prospect. The Clip- decision in April
However, the move has been questioned over per permit is located in the offshore Canterbury
the years by critics, who argue that the coun- Basin. 2018 to ban all
try will still need gas as it makes the transition Company CEO Andrew Jefferies, in his com-
toward a 100% green economy. pany’s statement announcing the move, fired a new offshore
Even the Climate Change Commission said warning shot across the government’s bow, not-
in its draft advice to government in January that ing that several challenges including the govern- exploration.
natural gas played a “significant role in the elec- ment’s “adverse regulatory settings for offshore
tricity system by backing up renewable genera- exploration” had tipped the joint venture’s hand.
tion” and that eliminating this use case scenario He said: “I expect it will not be the last off-
was “likely to be expensive for the size of the shore acreage to suffer the same fate. [NZOG]
emissions reductions they deliver”. believes a confluence of events including adverse

Week 09 05•March•2021 www. NEWSBASE .com P5