About the Industry
Natural gas makes a substantial contribution to New Zealand’s energy supplies, providing energy security and supporting the New Zealand economy in a way that helps to achieve the country’s environmental sustainability goals.
It is used by about 295,000 industrial, commercial and residential customers. It accounts for approximately 22% of total primary energy supply and 11% of total residential energy use.
The energy supply and economic importance of natural gas has grown rapidly since the first commercial discovery at Kapuni in 1959. This discovery led to increased exploration activity and further major gas finds.
The commencement of natural gas deliveries from the onshore Kapuni field in 1970 enabled the replacement of aging town gas works that produced gas from coal. The cleaner, more efficient natural gas was initially distributed through local gas networks to nine communities serviced by a transmission pipeline running north to Auckland and south to Wellington.
Around this time, gas supplies were greatly strengthened with the discovery of the much larger offshore Maui field. Maui gas deliveries began in 1979, heralding the rapid expansion of the high pressure gas transmission system to Northland, the Bay of Plenty and Hawke’s Bay and the reach of natural gas into all major populated centres of the North Island.
Today, natural gas has a wide range of applications, fuelling thermal power generation plants and large industries (including in the key export sectors of meat, dairy and timber processing, and steel manufacture), and providing the feedstock for petrochemical (methanol and ammonia/urea) production. Gas is also used directly in a wide range of small to medium commercial enterprises, and for cooking and for space and water heating in households.
In the past decade, as Maui gas reserves have diminished, the gas industry has transitioned from a dependence on that field to sourcing gas from multiple fields. Today, market demand of approximately 180PJ a year is met from about 17 different fields and wells.
While there has been exploration activity in many onshore and offshore regions of New Zealand, all gas production so far has been in Taranaki. Natural gas is not available in the South Island. However, LPG (liquefied petroleum gas), a mix of propane and butane extracted from natural gas, is available throughout the North and South Islands.