Prime Minister Christopher Luxon and Energy Minister Simon Watts confirmed that the Government will establish a liquefied natural gas (LNG) import facility to strengthen New Zealand’s energy security and support economic growth.

LNG will provide a reliable back-up fuel source to manage dry year risk, help stabilise electricity costs, and address New Zealand’s declining domestic gas supply. Having access to LNG in New Zealand is expected to deliver savings of upwards of $265 million per year by reducing electricity price spikes and lowering the risk premium that is currently built into power bills.

LNG will also buy time for many gas-dependent industries by reducing the risk of supply disruptions and extreme price volatility. Importantly, LNG pricing will maintain incentives for continued investment in renewable projects, and having access to LNG will give renewable energy investors greater confidence that they can bolster intermittent renewable generation with a reliable back-up option.

The Government’s decision to proceed with LNG follows extensive analysis and the first stage of a procurement process launched as part of the Government’s energy package in late 2025. The Government has shortlisted leading proposals for the facility and is progressing to commercial contracting, with the aim of signing a contract by mid-2026. If the current procurement process is successful, the facility could be operational as early as 2027.

While it is too early to confirm the exact location of the facility, it will likely be located in the Taranaki area. The Government expects to make further announcements in mid-2026.

Read the Minister’s press release:

Delivering LNG to support energy(external link) — Beehive.govt.nz

Access the LNG fact sheet:

Fact sheet: LNG [PDF, 185KB](external link) — Beehive.govt.nz

Original announcement link

Source: Ministry of Business, Innovation and Employment