- Hon Chris Bishop
- Hon Shane Jones
New Zealand is a step closer to securing its ongoing energy supply through the first projects to be supported by the Gas Security Fund, Resources Minister Shane Jones and Associate Finance Minister Chris Bishop say.
The fund will invest up to $23.5 million in two projects run by Todd Energy, a New Zealand-owned explorer and producer operating in Taranaki.
The Ministers approved the funding as time-limited loans with co-investment from Todd Energy, as part of New Zealand’s move towards more renewable energy.
“Together, these first investments from the $200 million Gas Security Fund could unlock up to 19.9 petajoules of additional gas reserves over five to nine years to maintain our energy supply as we transition to renewables,” Mr Jones says.
“These two projects, if successful, are expected to provide around four petajoules per year at peak production. That’s equivalent to around 6 percent of New Zealand’s 2027 expected gas production,” Mr Jones says.
The McKee Gas Cap project will receive a loan of up to $16.2m for drilling and connecting a new gas well, with Todd Energy contributing almost $7m.
The McKee-Tariki Production Well project will receive a loan of up to $7.3m toward converting an existing well to access gas in the deeper Tariki reservoir, with Todd Energy contributing about $3.1m.
“Maximising existing fields and infrastructure with an experienced New Zealand operator is one of the fastest ways to bring the needed gas to market, ensuring timely support for New Zealand’s ongoing energy needs, including a reliable supply of electricity,” Mr Jones says.
“Both projects will help keep domestic, commercial and industrial users operating, especially during periods of high demand, such as winter peaks or dry years when renewable electricity generation is lower.”
If successful, both projects are expected to have gas on stream by the end of 2027.
“Together, in the first year alone, these projects are expected to deliver the equivalent energy needed to power more than 80,000 New Zealand households for a year,” Mr Bishop says.
“Importantly, both projects involve significant co-investment from Todd Energy, ensuring the inherent risk associated with bringing new gas to market is shared. We’re using public funding to de-risk new gas well drilling and spark significant private sector investment for ongoing public benefit.
“Reliable and affordable energy is fundamental to a growing, productive economy. Businesses need confidence that the energy they depend on will be available when they need it, enabling them to plan ahead, invest and grow. That certainty supports investment, expansion and job creation.”
The Ministers say both projects align well with the Gas Security Fund’s objectives.
“The fund is designed to bring the gas we need to market more quickly and improve the reliability of our electricity generation while the country continues its transition to a lower-emissions economy,” Mr Jones says.
There has been strong interest in the fund, with 17 proposals submitted since it opened in January. More funding announcements are expected soon.
The Gas Security Fund is administered by Kānoa – Regional Economic Development & Investment Unit within the Ministry of Business, Innovation and Employment.
Investment decisions are made jointly by the Resources Minister and the Associate Finance Minister, supported by advice from an independent Gas Advisory Panel.
