8280 (2026). Scott Willis to the Minister for Energy

8280 (2026). Scott Willis to the Minister for Energy: Has he received any advice on whether a Liquefied Natural Gas import terminal would be commercially viable without a levy on electricity users, if so, what are the title and dates of advice?

Hon Simon Watts: The proposed levy is akin to an insurance premium for electricity users, providing security of supply that the market will not provide, as noted by the Frontier report. As stated in paragraph 54 of the Cabinet Paper proactively released Cabinet Paper “Government Investment in Dry Year Risk Cover: Consideration of an LNG Import Facility”, recovering the costs of an LNG import facility through commercial arrangements instead of a levy would add $5 - $22 per GJ to the price of gas, making LNG uneconomic and undermining its role as an insurance policy.   I am advised that officials in the Ministry of Business, Innovation and Employment (MBIE) gathered information from a range of sources as input to preparing the document “Exploring the case for LNG” published as Annex 3 of that Cabinet Paper, including from the stage one LNG procurement. Another example is the report published by the Gas Strategies Group in June 2025 “New Zealand LNG Import Feasibility Assessment available here https://cms.clarus.co.nz/assets/Uploads/PDFs/LNG/Public-Release-NZ-LNG-Addendum-on-Small-Scale-LNG-1.pdf. I met with Clarus on 15 May 2025 during which there was a discussion of small-scale importation of LNG. I received advice from MBIE on 14 May 2025 in preparation for that meeting.