Methanex Gas Sale - A Short-term Fix For A Systemic Problem

Energy Resources Aotearoa welcomes the pragmatic deal announced by Methanex today of an agreement with Contact Energy to sell ~2.8 PJ of gas over an eight-week period, starting immediately.

Chief Executive John Carnegie says, while it is good to see industry players once again broker a solution to security of the supply issues, this is like a band-aid on a gaping wound.

"Methanex is again propping up our electricity system and forgoing production and export earnings to do so, harming New Zealand’s GDP and terms of trade."

Contact Energy says the deal has been struck against the backdrop of the record-lowest first-quarter national hydro inflows and continued dwindling upstream gas supplies.

Carnegie says the Government needs to act urgently to stimulate investment in our upstream gas industry so the manufacturing industry can survive, and plan to expand and thrive.

"Where is the plan to encourage investment in this sector, which has underpinned growth and employment in the regions for decades, particularly in Taranaki?

This is yet another winter where security of supply issues in the electricity system have seen Methanex forgo production to bolster generation.

Does this mean we will look to other industries in winter 2026 to curtail production again to ensure the lights stay on? Or do we all start praying for rain?" says Carnegie.

"New Zealand needs a longer-term vision to return to prosperity rather than short-term fixes as we lurch from electricity supply crisis to crisis every winter.

The Government needs to demonstrate a vision for growth and prosperity by enabling a positive investment environment that delivers more gas into the system, which means that our generators and industries don’t have to keep reaching for the first aid kit."

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