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RNZ News
26-06-2025
- Business
- RNZ News
The double-whammy bill natural gas users have to pay
Photo: 123RF A controversial $200 million fund for investment in local gas exploration aims to tackle ever-dwindling supplies, but it won't be soon enough for thousands of households trapped with gas connections they don't want, a consumer expert says. The four-year contingency fund to subsidise new fossil fuel fields was announced by the Resources Minister Shane Jones at last month's budget. Just weeks later, the Ministry of Business, Innovation and Employment revealed that our natural gas supply is running out faster than previously thought, with latest data showing reserves have fallen 27 percent from last year. But any new developments will take years, and gas households already face surging costs, says Paul Fuge, manager of Consumer New Zealand's Powerswitch. Residential consumers make up only four percent of the country's total gas use and Fuge says it won't be running out in the near future. But that is no consolation for gas customers who are being hit in the pocket twice. "It costs more to have gas than electricity so an electricity-only house is much cheaper to run than a gas-electricity house because you can substitute all your gas appliances for electric appliances ... but you can't run a TV on gas or your lights on gas," Fuge says. That means gas customers have to have an electricity connection, which means double the costs of the infrastructure - gas pipes and electricity lines - needed to deliver the energy to people's homes. Gas customers are also locked out of cheaper electricity plans because most gas suppliers also demand that customers take their electricity. The companies that provide cheap electricity don't provide gas, Fuge says. Add to that the phasing out of low electricity charges for low users, which was a benefit for gas customers. "What that means is people's electricity connections for the low users are getting more expensive every year over five years and that disadvantages gas customers," he says. Customers who are renters are stuck with gas, as are people on low incomes because they can't afford to switch, Fuge says. He explains to The Detail why he thinks thousands of new households have connected to gas in recent years, despite rising prices. "I wonder if it's when people are building new houses, developers may be putting in gas for various reasons." MBIE does not have specific figures for new connections but based on rising residential use, Fuge calculates that the number of household connections has increased by around 18,000 since 2019, to 290,000. Residential customers make up the smallest proportion of gas use. According to industry group GasNZ more than half a million New Zealand homes and businesses rely on gas and Liquified Petroleum Gas (LPG). There are 300 large industrial gas customers, from methanol exporter Methanex to dairy plants and wood processors. Newsroom senior political reporter Marc Daalder says the large industrial users are more imperilled by the declining gas supply, as well as the electricity generators that rely on gas. He says the coalition's plans to repeal a ban on new oil and gas exploration will not solve our dwindling gas supplies any time soon. "The fastest we've had from a conversion from finding that gas to producing that gas is 10 years and it's hard to say in 2035 we know exactly what our gas needs are going to look like. "The reality is they're probably going to be a lot lower because we're going to be electrifying everything and some of the industries that we've got that rely on gas are going to be electrifying or closing down." The other option is finding more gas in the existing fields which has been going on consistently and continually for many years, including since the exploration ban was put into place. "About a billion dollars has been spent trying to find extra gas in those existing fields and there have been a few minor successes but nothing major." However, two fields are showing potential new gas finds, which the $200 million government co-investment fund could boost. "Shane Jones would really like for the government to be able to completely revitalise the gas industry and send people out looking for brand new gas in brand new places. The reality is we haven't found any gas in a brand new place for two decades or longer," says Daalder. "It's not like the Gulf of Mexico where there is all this gas sitting there. The resource probably isn't that strong; $200 million isn't going to suddenly make it commercial to take that big of a gamble." Check out how to listen to and follow The Detail here . You can also stay up-to-date by liking us on Facebook or following us on Twitter .
RNZ News
23-06-2025
- Business
- RNZ News
Gas exploration fund 'clear breach' of international trade agreement
Resources Minister Shane Jones. Photo: RNZ / Samuel Rillstone The coalition's $200 million dollar investment fund for local gas exploration is a "clear breach" of an international trade agreement, according to legal advice commissioned by the Green Party. The Agreement on Climate Change, Trade and Sustainability (ACCTS) is a deal the government struck with Costa Rica, Iceland and Switzerland last year, prioritising trade in sustainable goods and services. It has been described as a "ground-breaking" trade agreement that delivered commercial opportunities to New Zealand's economy, while addressing climate change and sustainability challenges. The agreement was the first New Zealand had concluded with these countries outside of the World Trade Organisation During last month's Budget, Resources Minister Shane Jones revealed a four year contingency fund to subsidise new fossil fuel fields. "Natural gas will continue to be critical in delivering secure and affordable energy for New Zealanders for at least the next 20 years," Jones said. "We are already feeling the pain of constrained supply." Climate advocates were quick to denounce the plan . In correspondence to the Greens last week, barrister Nura Taefi KC said the plan breached New Zealand's obligations to the deal that stipulates a ban on fossil fuel subsidies. "It falls within the definition of a prohibited fossil fuel subsidy in article 4.3, because it involves a financial contribution by the government targeting the exploration, extraction, refining and/or processing of a fossil fuel, and will confer a benefit by way of a cost reduction for co-investors." Last week Jones vowed to reboot the oil and gas industry during a fiery scrutiny hearing, in which he attacked the previous government for banning oil and gas exploration in 2018. Greens' co-leader and climate change spokesperson Chlöe Swarbrick. Photo: RNZ / REECE BAKER In a statement on Tuesday, Greens' co-leader and climate change spokesperson Chlöe Swarbrick said it was clear the government did not seek any advice or do any due diligence. "It took just six months for this government to breach a trade agreement that they themselves signed up to. "In November last year, Trade Minister Todd McClay sent out a PR celebrating signing the ACCTS. In May's budget lock-up, we spotted that their $200 million hand out to fossil fuel companies was probably in breach of that very agreement," she said. "True to type, we weren't able to get straight answers out of the government." The party called on the government to "recall" the investment plan. "There's no grey area here. This is a blatant violation of our international commitments," Swarbrick said. "If the government cared about energy security or regional resilience, they would be investing in distributed renewable energy. "Instead, they've decided to throw gas on the climate crisis fire and spit in the face of our Trade and Climate Agreements while lining the pockets of fossil fuel executives." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Reuters
21-06-2025
- Business
- Reuters
EnQuest to finalise $84 million Vietnam oilfield acquisition soon, CEO says
SINGAPORE, June 21 (Reuters) - UK explorer EnQuest (ENQ.L), opens new tab expects to complete the acquisition of Harbour Energy's (HBR.L), opens new tab business in Vietnam in the next month or two and plans to drill new wells to increase oil production there, CEO Amjad Bseisu said. The $84 million acquisition is part of the North Sea-focused company's expansion outside its home market. EnQuest will acquire just over a 53% equity interest in the Chim Sao and Dua production fields in Vietnam. "We were excited about the asset there as we see development opportunities, and we also see some in-fill opportunities," Bseisu told Reuters earlier this week. "So we'll be looking, once we take over, to investing in the field and trying to increase its productivity." In offshore Peninsular Malaysia, the company is on track to start producing non-associated gas from the Seligi field next year, Bseisu said. Daily gas production will be increased from 14,000-15,000 barrels of oil equivalent to 25,000 boe, he added. The company, along with energy majors, is investing in gas exploration and production in Southeast Asia to meet rising power demand from growing populations and a proliferation of data centres in the region. "Asia is our biggest growth engine now for gas," Bseisu said. In Indonesia, EnQuest is part of a consortium awarded in April the production and sharing for Gaea and Gaea II blocks, which are near the BP-operated (BP.L), opens new tab Tangguh LNG plant. Bseisu said EnQuest's strategy in Indonesia is to try and find gas close to existing plants. He added that domestic gas production is more attractive than liquefied natural gas (LNG) for governments as it creates revenue, jobs and expands the industry.
ABC News
20-06-2025
- Business
- ABC News
Activists concerned as SA government offers South East for gas exploration
The South Australian government has offered land for onshore gas exploration in a move that has angered activists in a key agricultural region. The government is offering exploration licenses for the Otway Basin in the state's South East and Polda Basin on the Eyre Peninsula. SA Energy and Mining Minister Tom Koutsantonis said the Cooper Basin and parts of the state's west also had the potential for gas extraction. "We're very keen to try and exploit that as much as we possibly can to try and put downwards pressure on prices and back up our renewable-generation fleet," he said. But the potential for exploration on the Otway Basin is a cause of concern for activists in the South East, where a 10-year moratorium on fracking will be in place until 2028. Limestone Coast Protection Alliance chair Angus Ralton, who was part of the initial opposition to fracking, said he was "disappointed" in the direction the government was heading. "The climate crisis is only accelerating and governments need to be moving away from fossil fuel," he said. The acreage releases come as the Australian Energy Market Operator (AEMO) projects a shortfall in gas supply for south-east Australia from 2029. Mr Koutsantonis said renewables were sufficient "90 per cent of the time, even 95 per cent", but gas peaking plants were still needed as back-up. "Gas is an important fuel for firming our renewable resources by having reliable gas-fired generators," he said. "The more gas you have in the system, the more industry you have and the more prices drop in the National Electricity Market. "[The south-east is] an area with existing infrastructure, so it'd be cheaper to restart. "It's got distribution with the SEA Gas pipeline, which gets us to the Victorian market and the South Australian market, so there's lots going for it." Australian company Beach Energy mothballed its Katnook processing plant near Penola in 2022. "While no decisions have been made regarding the South East, Beach holds tenure close to significant infrastructure in the region and the delivery of local gas to market aligns with Beach's vision to become Australia's leading supplier of domestic gas," a Beach spokesperson said. Mr Koutsantonis said SA farmers were struggling financially in the midst of a drought and that reducing energy prices by increasing gas supply was a way to provide relief. "The drought's having a real-life impact, especially on farming communities, and a lot of people rely on industry," he said. Ken Baldwin from the Australian National University said the shortfall required action by the government to secure supply. "This could come through a number of means — by increasing the amount of gas that is produced in the district, reduce the amount of demand in the region … or to implement a gas reservation policy," he said. "As we move forward and decarbonise the economy we need to really be focusing on reducing the demand in the first instance and, if all else fails, increase the amount of supply to match the diminishing gas reserves by finding new sources of gas." Professor Baldwin said there were very few industries that could not switch to electrical forms of energy supply. "That's a very small fraction of the total demand," he said. Mr Ralton said the alliance planned to raise its concerns with the state government. "We would urge the government to reconsider their position … and not take this any further," he said. Department for Energy and Mining chief executive Paul Martyn said staff had "extensively engaged" with the community. "We've, I think, got a very good understanding of the community's views," he said. "We will expect any company that's undertaking exploration in the area to thoroughly engage with the community and to meet the highest standards." Mr Koutsantonis said community sentiment was taken into account. "Those activists didn't want fracking, so there'll be no fracking in the South East," he said. "They argued you can extract gas conventionally — this is exactly what that is." Mr Koutsantonis said the government considered fracking in the region to be "finished as a concept". "We have no plans to allow fracking in the South East," he said.
Yahoo
18-06-2025
- Business
- Yahoo
Energy majors lock onto Southeast Asia in race for more gas for AI power demand
By Ashley Tang, Sudarshan Varadhan and Florence Tan KUALA LUMPUR (Reuters) -Energy majors are pouring money into gas exploration and production in Malaysia and Indonesia to meet rising power demand from growing populations and a proliferation of data centres in the region. The wave of investments come as European majors pivot back to more profitable conventional fuels as countries embark on different energy transition paths, while Southeast Asian governments want more affordable local gas supplies to drive economic growth and improve energy security. At the Energy Asia conference in Kuala Lumpur this week, Shell committed to increasing its investments in Malaysia by 9 billion ringgit ($2.12 billion) over the next two to three years, Malaysian Prime Minister Anwar Ibrahim said on Tuesday. "Just between now and 2035, gas production in Southeast Asia is expected to drop by around 20% ... and that needs to be backfilled," Shell CEO Wael Sawan told the conference. "And the most viable backfill is, of course, LNG because the infrastructure is already gas based." On Monday, French major TotalEnergies acquired further stakes in Malaysian gas assets from state energy firm Petronas. "This is where the population is growing I would say. So this is where we need more energy," CEO Patrick Pouyanne said. Italian major Eni and Petronas are pressing ahead with a planned joint venture to develop gas assets in Indonesia and Malaysia with a deal expected to be signed by the end of this year. Japan's top explorer Inpex has returned to Malaysia and is working on exploring resources in six blocks offshore Sarawak and Sabah, on top of developing Indonesia's Abadi LNG project, CEO Takayuki Ueda told Reuters. "The demand for natural gas, especially LNG, will actually be increasing over a longer time after 2040, maybe up to 2050," he said. "Given the current, very uncertain and unpredictable geopolitical situation, one of the strategies that we are now taking is local production for local consumption," he added. ConocoPhillips CEO Ryan Lance told local media that the U.S. major plans to invest in Sabah after it dropped the WL4-00 project in Sarawak. Natural gas or LNG is seen as the fuel for the region to replace coal and reduce emissions, while gas-fired power plants can also provide a stable power source for data centres. Petronas CEO Tengku Muhammad Taufik Tengku Aziz said the firm is working to serve a surge in power demand from data centres which is expected to more than double to 945 terawatt hours globally by 2030. "The entire energy systems at our disposal are now working to serve this surge in demand," he said. S&P Global vice chairman Daniel Yergin said gas now has a much bigger profile than it did a couple years ago. "Countries are not going to be able to generate the electricity they need for growth and for data centres without a bigger role for natural gas," he added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
