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Maui Redetermination Report – Contact 's Reaction

Maui Redetermination Report – Contact Energy Reaction

Contact today received the final report from the Independent Expert (IE) on the remaining economic recoverable reserves in the Maui gas field. While Contact is still studying the document in detail, our initial view is that the final report remains broadly consistent with our expectations, Contact Energy’s chief executive, Mr Steve Barrett, said today.

“The IE’s Maui redetermination report is relatively little changed from the draft report received prior to Christmas and is in line with the estimates of remaining reserves compiled by Contact’s own expert advisers,” Mr Barrett said.
The redetermination will lead to an adjustment to Contact's entitlement under its supply contract with the Crown.

Today’s announcements clear the way to resolve how this remaining gas will be allocated to the various parties through time, both on a daily and year to year basis. That process will begin in the near future.”
“We are hopeful that agreement can be reached quickly among the parties to the Maui Contracts ,” said Mr Barrett. “This is a particularly important issue because the rate at which gas is delivered over the next few years will have major implications for short term flexibility and security of supply for both the gas and electricity markets.”

Parties involved in the discussions will be the Maui Mining Companies, the Crown and the three buyers of Maui gas under the Maui Contracts: Contact Energy, NGC Holdings Ltd, and Methanex.
Mr Barrett said that the reduction in Contact’s entitlement under existing contracts would be broadly offset by reductions in on-sale obligations under downstream supply contracts.

“The exact implications of these changes will take some time to become clear,” said Mr Barrett.

Mr Barrett stressed that "the Maui redetermination process is not expected to significantly affect the availability of gas to residential and smaller commercial customers, as their total demand is relatively small compared to total current use".

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