Natural gas prices rise 12% to $7.41 per GJ, Contact says

Sources: Contact Energy and Lindsay Clark

This increase was 12 per cent up from $6.61 per GJ in the second half of 2008 (note: price excluded the cost of transmission).

Contact says in its management discussion in the half year report for 2009 that the increase had been driven by a change in the underlying mix of gas used as the use of cheaper Maui 367 legacy gas ceases and is replaced by more expensive gas.

Contact Energy, which is the largest user of gas in New Zealand for its electricity generation plants, said the average cost of gas used in generation increased by 14 per cent to $8.17 per GJ in the second half of 2009 from $7.18 per GJ in the corresponding period of 2008.

The cost of gas for the 2009 half includes approximately 2.5 PJ of gas which Contact was required to pay for but did not take. The gas was not taken because electricity prices at the time were not high enough to justify running the thermal plant.

While 2.5 PJ of gas was injected into gas storage at Contact’s new Ahuroa gas field storage project during the six months ended 31 December 2009, injection capacity was insufficient to take the total volume which the company would have preferred to inject.

The cost of gas paid for but not taken added approximately 65 cents per GJ to Contact’s cost of gas in the six months ended 31 December 2009.

Contact used 15.7 PJ of gas in generation in the 2009 half year, a 2.6 PJ reduction from the same half of 2008.

Gas revenue from wholesale customers increased by $3.6 million to $43.3 million in the December 2009 with volume sold up slightly to 6.4 PJ.

Retail gas revenue was slightly lower at $44.0 million in the 2009 half year. But Contact reported declining numbers of gas customers. Levels were 65,000 at 31 December 2009, 67,000 at 30 June 2009 and 70,000 as at 31 December 2008.

Related links

Ahuroa gas storage - Gas production statistics - NZ Petroleum Conference