The Government will fast-track the consent process for a new liquified natural gas terminal in response to energy shortages.

Prime Minister Christopher Luxon, Energy Minister Simeon Brown and RMA Reform Minister Chris Bishop announced today the Government would legislate consents for an LNG terminal.

Brown has previously said that LNG could be used to reduce energy supply issues and put a lid on price spikes.

Information released with the announcement today said that imported LNG would “support flexible generation of electricity, but is unlikely to replace the energy needed from stable, year-round, domestic gas”.

Officials estimate the price for importing LNG to New Zealand using the spot market could be between $17/gigajoule and $24/gigajoule.

That price range is below the current NZ gas spot price which traded at an average of $55.27/GJ on August 14, an all-time high.

Project-specific legislation has been utilised previously, including for projects such as the National War Memorial in Wellington.

The Government reiterated its commitment to reverse the offshore oil and gas exploration ban, which they hope will mean more domestic gas.

Other announcements included allowing lines companies to own more generation. Electricity distribution businesses (EDBs) are currently prohibited from owning generation assets of more than 50MW connected to their own network, and are also required not to own assets of more than 250MW connected to Transpower’s network.

The Government has agreed to ease these restrictions to increase electricity generation and bolster regional resilience. Details will be confirmed by Cabinet later this year.

The Government is also receiving advice on whether to allow draw-down of hydro lakes below their consented levels. This would mean giving generators permission to pull even more generation out of hydro lakes. If changes are needed, then they will be progressed through the Energy and Electricity Security Bill ahead of winter 2025.

Brown also said the government will review the performance of the electricity market. Brown has been critical of the amount of investment in generation, telling Q&A over the weekend, “we haven’t seen as much investment back into generation as we should have from the gentailers”.

Bishop announced the Government was delivering on its Electrify New Zealand manifesto commitment.

He said the Government had agreed to legislate to reduce consent and re-consenting processing time for most renewable energy consents to be within 1 year, as well as extending the default lapse periods for renewable energy, transmission and local electricity lines consents from 5 years to 10 years.

The Government will extend the default consent duration for renewable consents to 35 years.

The Government will also introduce a Bill to enable a regime for offshore renewable energy to be in place by mid-2025 with the aim of opening a first feasibility permit round in late 2025.

This regime will give developers greater confidence and certainty to invest and will enable the selection of developments that will deliver the most benefit for New Zealand. We are releasing decisions on the design of the regime today.

Brown blamed the previous government for the energy crisis and said he would look at importing liquefied natural gas (LNG) to plug shortages. The shortage is crippling several large manufacturing plants, including Winstone Ruapehu and Oji Penrose.

Brown laid some blame at the feet of the large gentailers, which have not invested heavily in generation since they were part-privatised by the Key Government.

“I think we haven’t seen as much investment back into generation as we should have from the gentailers,” he told Q+A’s Jack Tame on television at the weekend.

Expensive terminal infrastructure needs to be built in New Zealand before any LNG could flow.