Regional LNG: Contact, Genesis Power to import LNG to New Zealand

Contact Energy Ltd., New Zealand's largest energy company, and Genesis Power Ltd. are in talks this week with companies that could supply the country with liquefied natural gas, Genesis Chief Executive Murray Jackson was quoted by Bloomberg as saying.

Contact and government-owned Genesis, New Zealand's largest gas retailer, are studying the possible construction of a terminal that would import as much as 3 million metric tons a year to avoid a local shortage expected as soon as 2008, Jackson said. Woodside Petroleum Ltd.'s Sunrise project in the Timor Sea, Brunei LNG Sdn., part-owned by Royal Dutch/Shell Group, and producers in Indonesia are among possible suppliers, he said.

``Australia has significant contracts with China, so does Indonesia; Timor, Woodside, Brunei are all equally participating in the market,'' Jackson said at the Australia-Asia LNG Review conference in Perth.

Genesis and Contact may link up with buyers in Japan and Korea for LNG purchases to take advantage of different peak demand periods in the northern and southern hemispheres. Japanese and Korean demand wanes during the northern hemisphere summer, when New Zealand's gas demand reaches its winter peak.

Contact, which supplies one-third of New Zealand's power, last month appointed engineers Kellogg Brown & Root Pty to advise on possible sites for an LNG terminal in New Zealand. Contact and Genesis operate New Zealand's biggest gas-fired power stations and began work on the LNG import project last year because of concern that rising demand may outstrip local gas supplies by the end of the decade.

Poten & Partners, a New York-based adviser on fuel trading and transportation, will study the possibility of co-operating with Japanese and Korean buyers, Jackson said. An LNG import terminal may cost NZ$250 million to NZ$300 million to build, he said. Genesis and Contact are holding discussions during the conference in Perth.(*)