Important Facts of the News
- The fund’s value is $200 million.
- It was initially limited to new gas field development.
- Scope broadened to include short-, medium-, and long-term gas projects.
- Short-term focus includes existing field drilling and facility upgrades.
- Medium-term focus includes gas exploration and appraisal drilling.
- Long-term initiatives involve greenfield exploration beyond Taranaki.
- The fund will also back gas storage projects.
- Managed jointly by the Minister for Resources and Associate Minister of Finance.
- Administered by MBIE through Kānoa, with an advisory panel.
- Expressions of interest invited later this month.
Government widens scope of $200m gas co-investment fund
New Zealand’s gas sector is set to receive significant support as the Government expands the mandate of its $200 million Gas Security Fund. The initiative, originally aimed at encouraging new gas field development, will now cover a wider range of investments to bring more gas to market in varying timeframes.
Resources Minister Shane Jones and Associate Finance Minister Chris Bishop confirmed that the broadened scope will allow the fund to target gas supply improvements in the short, medium, and long term. This adjustment is seen as a vital response to the country’s dwindling gas reserves and growing concerns about energy security.
Energy supply pressures drive urgency
New Zealand faces a growing shortfall in its gas supply, leading to higher electricity prices for households and businesses. Mr Jones highlighted that the situation has rapidly deteriorated and that immediate action is required to avoid further strain on industry and communities.
“As our reserves decline, electricity costs are rising, and essential gas-dependent sectors are under threat. While long-term exploration is crucial, we also need practical solutions now,” he said.
Short-term interventions could include additional drilling in existing gas fields, while medium-term measures might involve exploration and appraisal activities. On a longer horizon, greenfield exploration beyond the traditional Taranaki region is planned.
Supporting storage and tackling investment hesitancy
The Gas Security Fund will also back gas storage projects, recognising the role of storage in balancing supply and demand throughout the year.
Mr Bishop noted that one of the biggest challenges is reducing the perception of risk among investors, especially following previous restrictions on petroleum exploration outside onshore Taranaki.
“To overcome investor hesitation, we will introduce flexible, commercially viable investment structures,” Mr Bishop said. “Each proposal will undergo expert legal review to ensure compliance with international norms.”
Local focus and next steps
The fund will promote regional procurement and use local workers as much as possible. Decisions will be made jointly by Mr Jones and Mr Bishop, with guidance from an independent advisory panel experienced in the gas sector.
The fund will be managed by Kānoa, the Regional Economic Development and Investment Unit under MBIE. Expressions of interest are expected to open later this month, with the Government keen to back investment-ready projects promptly.
“We call on our political colleagues to support a balanced approach to energy security by recognising the essential role of gas in New Zealand’s transition,” the Ministers added.