Electricity Authority welcomes gas agreement

The Electricity Authority has welcomed a gas supply agreement between Genesis Energy (Genesis) and Methanex. The agreement is in place for each winter from 2021-2023.

The deal is for the sale and purchase of a 3.4 PJ - 4.4 PJ tranche of winter 2021 gas and swaps for each of 2022 and 2023.

“Given New Zealand is grappling with a dry year risk and a lack of gas availability for both industrial users and generators, this agreement provides certainty that there will be enough fuel for generation,” says Andrew Doube, Electricity Authority, General Manager, Market Design.

“The gas agreement is one of several market arrangements that have helped manage the dry year risk,” says Mr Doube. “Others include the Tiwai smelter agreeing with Meridian to reduce consumption, the long standing swaption between Genesis and Meridian, a separate deal earlier in the month between Genesis and Greymouth for 700-800 TJ of winter 2021 gas, and the tolling arrangement between Todd and Contact.

“Each of these market-based arrangements has resulted in an improvement to security of supply.”

You can read the announcement here(external link).