New Zealand's largest gas user struck a deal to give up almost a third of its contracted supply over winter to relieve pressure on the strained energy market.

Methanex, which produces methanol from plants in Taranaki said it will idle another of its facilities as part of a deal under which it would sell 3.4-4.4 petajoule of gas to Genesis, owner of the Huntly Power Station, New Zealand's largest thermal electricity generator.

Friday's deal also included smaller swap agreements under which Genesis may buy gas in winter from Methanex in return for summer supply in 2022 and 2023, the NZ Herald reports.

Meridian has also recently announced agreements with the Tiwai Point aluminium smelter under which the smelter will cut electricity use to increase supply to the national grid, although the Genesis deal with Methanex is many times larger.

NZ Herald Wellington Business editor Hamish Rutherford told Heather du Plessis-Allan that we don't have enough fuel at the moment to produce electricity.

"[Methanex] are the obvious candidate to curtail use."

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