New Zealand is about to spend more than a billion dollars on a floating LNG terminal so we can buy expensive gas from overseas. Here is the bill.
One more terminal and I'm sorted, promise. A billion or so, and it's not a subsidy.
The Government has shortlisted two proposals to bring liquefied natural gas into Port Taranaki. Both use a moored vessel that stores LNG and turns it back into gas for the pipeline network. A preferred provider is due to be picked later this year, with imports flowing from about 2028. The build is costed at over a billion dollars, and one assessment puts it as high as $2.7 billion.
Nobody involved is calling it a subsidy. The original plan was a levy on electricity, which was then replaced by a user-pays model where power companies fund the terminal instead. The modelling behind the decision stayed hidden until the Chief Ombudsman ordered its release in August 2026. It found that access to LNG should not materially affect average electricity prices.
Nobody could have predicted the gas running out. Except the geologists, who put it in writing years ago.
New Zealand's proven and probable gas reserves fell 23% in a year to 731 petajoules, the lowest level since records began two decades ago. Maui is winding down. Pohokura, the country's largest field, is now expected to stop producing in 2033, a full decade earlier than previously indicated. Annual production is dropping below 100 petajoules years ahead of the official forecast.
This is depletion rather than a paperwork problem. Since 2020 the industry has spent more than $1.5 billion drilling 53 wells and found very little worth developing. Fields empty out whatever the policy settings say. The real question facing households is whether to replace that gas with a more expensive imported version or to stop needing it at all.
I'll be cheap, honest. Unless Japan has a hot summer or a tanker takes the long way round.
Imported LNG is priced off the Asian spot market rather than off a Taranaki wellhead. The Japan Korea Marker sat at US$27.23 per MMBtu on 16 September 2026, up 137% on the same time last year, driven by heat in Japan and shipping disruption near the Strait of Hormuz. In August 2022 the same benchmark hit US$69.96.
Officials estimated landed LNG at $17 to $24 a gigajoule. Independent modelling by Concept Consulting put an unsubsidised terminal nearer $33 a gigajoule, roughly double what domestic gas has cost. New Zealand would be a small buyer at the end of a long queue, taking whatever price a cold snap somewhere else happens to set that week.
It's not a levy any more. The power companies pay now. They'll pop it on your bill, but that's different.
The terminal was first going to be funded by a levy of $2 to $4 per megawatt hour on electricity. That became a user-pays model in which the large generators fund it instead. Those same generators sell power to households, so the cost lands in the same place. As the Major Electricity Users Group put it, at the end of the day somebody pays.
The Government claims $265 million a year in avoided price spikes, working out at roughly $50 per household. The released modelling does not support a material fall in average prices. Meanwhile a gas connection already costs around $830 a year in fixed daily charges before a single unit is burned, and networks can add up to $5 a month more from 1 October 2026.
Sign here for fifteen years. Thirty if you're kind. You wouldn't strand an old man mid-contract, would you?
The facility is expected to run for more than fifteen years, and the pipelines and supply contracts around it are built to last longer again. Parliamentary Commissioner for the Environment Simon Upton warned of self-reinforcing path dependence, noting that a billion-dollar conventional scale facility will cast a much longer shadow. Infrastructure of that size needs steady volume to pay for itself.
Concept Consulting's analysis put the net cost of a cross-subsidised terminal at $6.2 billion, with electricity prices about 3% higher out to 2035 and 29.6 million tonnes of extra emissions from prolonged gas use. Liquefying and shipping the gas adds energy losses on top of that, and satellite measurement has found methane from gas fields running well above what operators report.
Electric ovens? In my bakery? The lads would never trust a loaf that wasn't cooked on a flame!
Households hold over 90% of New Zealand's gas connections but burn only about 4% of the gas. The rest goes to industry, into boilers, dryers, kilns and ovens making food, milk powder, paper and steel. An import terminal is built for that demand, and the household bill that pays for it is a rounding error next to the volume a single food processing plant gets through.
The technology to replace most of that heat already exists. Rewiring Aotearoa's analysis found around a third of large gas users could electrify profitably right now with no support at all, using industrial heat pumps and electric boilers. Every year that decision is deferred is another year of exposure to an imported fuel priced in Asia, paid for by everyone on the network.
Solar panels don't need me. Heat pumps don't need me. What's an old flame supposed to do?
Rewiring Aotearoa's research puts the annual bill saving for a fully electric home at $7,600 compared with a gas and petrol household. Counting the upfront cost of the gear, that comes to about $3,000 a year, or $45,000 over fifteen years. Rooftop solar delivers power at around 12 cents a kilowatt hour against 26 cents from the grid.
Scaled up, that is $12.9 billion a year off national energy bills and $61 billion net by 2040, alongside around 58,000 jobs in the build-out. Roughly a third of large gas users could electrify profitably today with no support at all. Money spent on heat pumps and panels stays with the household instead of leaving for an overseas supplier.
Every dollar spent on imported LNG leaves the country. Every dollar spent on sun, wind and water stays in it. Everyone wins when we go electric. And in the coming years, New Zealand has a unique opportunity to set itself up as a beacon for the world to follow on.
We want all our MPs, no matter where they are on the political spectrum, to push for more New Zealand-made energy running through more efficient electric machines, because electrification is key to our economic growth, energy security and emissions reduction goals.
We want more New Zealanders to understand the benefits of going electric in their own lives. Energy is a low-interest category. We want to capture their attention.
Sunshine on your own roof costs about 12 cents a kilowatt hour against 26 cents from the grid. A fully electric home is around $7,600 a year better off on running costs, and about $45,000 ahead over fifteen years once the upfront spend is counted.
These are Rewiring Aotearoa's published positions, not ours to invent. Every one links back to where it was said.
We don't like burning Indonesian coal so why would we try to solve the problem with expensive Australian gas? There are cheaper, cleaner solutions to fix the problem and they're here at home.
Rewiring Aotearoa wants the Ratepayers Assistance Scheme legislated so councils can offer long-term loans at 1 to 1.5 percent below mortgage rates for solar, batteries and electric machines. Upfront cost is the main barrier.
sourceThey call for urgent regulatory action to make symmetrical export tariffs mandatory across all networks, so people are paid the same rate for power they send out at peak as they are charged to take it.
sourceRewiring Aotearoa argues investing in natural gas in homes no longer makes economic sense, and asks for a managed transition away from gas for homes and non-industrial businesses, with clear timelines for retiring the networks.
sourceIn their Fuel Security Plan submission they propose replacing incremental fuel security tinkering with a National Energy Independence Plan, because electrification is the single biggest opportunity to cut our reliance on imported fuel.
sourceRewiring Aotearoa signed an open letter urging the Government not to proceed with taxpayer subsidies for an LNG import terminal, saying it would lock customers into higher prices and more exposure to global price shocks.
sourceInstead of imported gas, they want much more solar on homes, farms and businesses, plus more wind and geothermal, pointing to Australia where rooftops supply around 15 percent of electricity and 200,000 homes have batteries.
sourceTheir 2025 policy manifesto asks politicians to have a compelling electrification vision and strategy, and to get rid of unnecessary red tape and modernise the rules that slow solar, batteries and connections down.
sourceThe gas ran out because it was always going to. What we choose next is up to us, and the cheaper option is already sitting on the roof.
