New Zealand set to build LNG import facility to boost energy security

SYDNEY: New Zealand has shortlisted contractors to build ‍a liquefied natural gas (LNG) import facility to boost energy security, provide ⁠a reliable backup power source and support economic growth, Energy Minister Simon Watts said on Monday.

The government aims to sign a contract ‌by the ‌middle of this year for an import facility in Taranaki, on the ‌country's North Island, that would be ready to receive LNG in 2027 or early 2028.

The model will allow LNG to be imported in large shipments and only when needed, limiting exposure to global gas prices.


Despite a ​boom in renewable electricity generation, mostly hydropower, declining gas ‌supplies have ‍left New Zealand's power sector vulnerable during ‍droughts when water levels at the lakes and ‌dams run low, Watts said.

"The result is greater reliance on coal and diesel, and ultimately higher electricity prices, putting more financial pressure on families and making businesses less competitive," Watts said in a statement.

"Establishing an LNG import facility is an important next step."

The ‍centre-right government elected in 2023 has sought to diversify energy sources. In 2025, it passed ‍a law ⁠to reopen the country ⁠for offshore oil and gas exploration, lifting a ban imposed by the previous centre-left Labour-led government.

Watts said access to LNG could deliver economic benefits estimated at NZ$1.2 billion ($721.6 million) annually by 2035 and help protect around 2,000 jobs from the impact of rising energy prices and gas shortages.

($1 = 1.6631 New Zealand dollars)