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Natural gas prices up 24% to $6.61 per GJ for Contact Energy
16 April 2009 - Natural gas prices rose by an average of 24% to $6.61 per gigajoule in the second half of 2008 from $5.34 per GJ in the same period of 2007, Contact Energy says.
The company is one of New Zealand’s largest purchasers and retailers of natural gas.
Contact Energy says in its management discussion report for the six months ended December 2008, that the increase in the cost of gas (excluding transmission) was driven by a change in the underlying mix of gas used.
The increase occurred as the use of cheaper Maui 367 legacy gas (priced at the old Maui Gas Contract prices) decreased and was replaced by more expensive gas, and also by the impact of escalation in gas prices in gas contracts within Contact’s portfolio.
Contact’s gas revenue from wholesale customers grew by $3 million to $39.7 million in the period ended 31 December 2008. This was largely due to the increase in prices, since the volume was relatively flat between the periods at 6.3 PJ compared with 6.6 PJ in the six months ended 31 December 2007.
Retail gas revenue for Contact was slightly lower at $46.6 million in the latest half year, compared with $47.1 million in the 2007 second half. The sales volume remained flat at 2.3 PJ in the latest six months.
Gas customer numbers have decreased to 70,000, compared with 74,000 as at 31 December 2007 and 75,000 as at 30 June 2008.
The average gas transmission cost for retail also increased by 8% from $10.18 per GJ in 2007 to $10.96 per GJ for the six months to 31 December 2008.
Contact managed to grow its customer numbers for liquid petroleum gas, unlike in retail gas.
Total LPG customers (including customers of franchisees) increased by 3500 to 54,400 compared with 50,900 as at 31 December 2007 and 52,500 as at 30 June 2008.
However the total LPG volume sold reduced by 4200 tonnes to 41,800 tonnes in the second half of 2008, from the same period of 2007.
Revenue from LPG sales grew by 20.7% to $85.2 million. The main driver of this increase was the underlying purchase cost of LPG which increased by 35% between the 2007 and 2008 period. This was largely due to the imported cost of LPG which tends to move with oil prices.
Source: Contact Energy and Lindsay Clark
