LNG terminal decision delayed until after the election
The Government will not decide until after the election whether taxpayers should underwrite a new LNG terminal.
ACT and New Zealand First confirmed the delay on 23 September, after a Cabinet committee met that morning to discuss the plans. RNZ
New Zealand First leader Winston Peters said no decision had been made. He said the Cabinet position was not to make a decision that day, and that was the collective view of all three governing parties at the sub-committee with no pushback.
ACT leader David Seymour said signing a contract before the election would be irresponsible. He said he did not know a deal was possible before the election, but the tender process for the terminal could continue.
No contract will be signed before polling day. The tender stays live. The commitment does not.
The pause is a change to the previous timetable. The Government had intended to sign a contract before the election so the terminal could be operating by mid-2028. Energy Minister Simeon Brown had previously said a contract could still be signed during the election campaign.
The stated purpose of the terminal, which would import liquefied natural gas, is to provide backup for dry years when low lake levels cut hydro generation. An underwrite means the Government would carry part of the cost or risk. The Government has stepped back from a levy to pay for it, and is imposing steeper fines on power companies alongside that change.
The project was announced in 2025. The import facility is planned for Taranaki on the North Island. Reuters
The Government had shortlisted leading proposals and was moving to commercial talks, with an aim to sign a contract by mid-2026. Beehive
Two providers were later shortlisted for the proposed terminal. Reuters
An earlier planning document, New Zealand's Energy Package 'At a Glance', said the next decisions were expected in December 2025. Earlier reporting put readiness in 2027 or early 2028. The most recent account puts the operating target at mid-2028.
The Government had also wanted the proposed terminal to bypass the fast-track consenting process so it could be built in time for winter next year.
Two developments have changed the gas picture. Methanex, which at times used close to half of New Zealand's natural gas supply, is closing its Taranaki plant next year. Genesis Energy picked up major gas contracts running from March next year to December 2029.
The broader context here is about risk and timing rather than buying alone. An underwrite would put the Crown behind a dry-year backstop, and agreement across the coalition was needed before the election to lock that in. With that agreement withheld, the bidding process can run but ministers cannot bind a future government. For officials, bidders and the electricity sector, the question now passes to ministers after the election: whether to proceed, how to pay for it without a levy, and to what delivery date.
