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Natural Gas Corporation - Genesis Power Deal

REL: 1300 HRS

Natural Gas Corporation Holdings Limited

GEN: NCH: GAS DEAL WITH GENESIS

Natural Gas Corporation (NGC) has concluded a major natural gas supply agreement with Genesis Power Limited.

NGC will supply a total of approximately 90 petajoules of gas to Genesis in varying annual amounts over the next eight years for use in the Huntly and Te Awamutu power stations. NGC currently sells about 35 petajoules of natural gas a year.

NGC Chief Executive Officer, Mr Richard Bentley, said today the agreement, which followed a competitive tender process, would enable NGC to start accessing its valuable pre-paid Maui gas assets from next year. NGC had approximately 135 petajoules of pre-paid gas, representing volumes paid for but not taken by the Company in previous years under its take-or-pay contract with the Crown for Maui gas.

It would also accelerate access to NGC_s advance paid Maui gas entitlements. As part of revised Maui gas contract arrangements with the Crown in 1990, NGC purchased approximately 350 petajoules of gas in advance for a single payment of $235 million. This volume is generally taken up at the rate of one unit for every two units of gas purchased from the Crown under NGC_s take or pay contract.

_The supply agreement with Genesis is a major accomplishment for NGC in a very competitive gas supply market and has significant benefits for the Company,_ said Mr Bentley.

Mr Bentley also announced that NGC had acquired full ownership of the LPG niche marketing company, Propane Gas Limited, following a buy-out of its 50 percent co-venturer, French company Elf Antargaz, for $4.5 million.

Mr Bentley said this initiative further consolidated NGC_s LPG interests, which included production and sale of LPG from its Kapuni gas treatment plant, a wholesaling activity based on the recently-acquired BP service station forecourt LPG business, and a 60.25 percent interest in Liquigas Limited.

NGC trades approximately 70,000 tonnes of LPG annually. Propane Gas Limited continues to develop niche markets for bottled propane in the commercial, industrial and domestic sectors.

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