The New Zealand government has formally announced plans to build a liquefied natural gas (LNG) import facility in Taranaki on the North Island as part of a major strategy to strengthen the country’s energy security and economic resilience. Energy Minister Simon Watts confirmed on Monday that the project has progressed from feasibility studies to active procurement, with leading proposals now shortlisted and a final contracting decision expected by mid-2026. Officials say the facility could be operational as early as 2027 or early 2028, marking a significant shift in New Zealand’s approach to managing future energy supply risk.
The government’s announcement comes amid concerns over declining domestic natural gas supply, particularly after several mature fields in the Taranaki Basin experienced diminished output. New Zealand’s energy system has relied heavily on hydroelectric power, yet dry years — which lower water levels — have historically forced generators to switch to more expensive and more carbon-intensive fuels such as diesel and coal. This volatility has contributed to higher electricity prices and increased pressure on both households and industry. By importing LNG only when needed, officials believe the terminal will provide a reliable backup source of gas for electricity generation and industrial demand during periods of tight supply.
Economic modeling cited by the government indicates the LNG import capability could contribute approximately NZ$1.2 billion annually to the national economy by 2035, while protecting an estimated 2,000 jobs from the adverse effects of energy price shocks and supply shortages. A government factsheet also suggests that access to LNG may help reduce electricity prices by at least NZ$10 per megawatt-hour (MWh) during critical periods, even after accounting for an estimated electricity levy of NZ$2 4/MWh to fund the infrastructure. 
Port Taranaki the proposed hub for the facility welcomed the development, emphasizing its strategic role in bolstering energy infrastructure. The port’s chief executive highlighted existing assets, including wharves, pipelines, and storage areas, that could be leveraged to support efficient operations and reduce build-out time. Although the port itself will not act as an LNG developer, it expressed readiness to support investors and industry stakeholders with logistics, marine services and long-term infrastructure planning.
Industry and public commentary on the decision has been mixed. Supporters argue that the LNG import facility represents a pragmatic response to New Zealand’s current energy challenges, bridging supply gaps while renewable generation capacity expands. Critics, however, caution that reliance on imported fossil fuels could expose the country to fluctuating global gas prices and potentially slow progress toward decarbonization. Nevertheless, the government has maintained that this project is a necessary component of a diversified, resilient energy portfolio that complements the ongoing expansion of renewable generation capacity.