Energy Minister Simon Watts says he and Prime Minister Christopher Luxon are “very much aligned” when it comes to the Government’s plans of building a liquefied natural gas (LNG) import terminal.
“We’re in a procurement process,” Watts reiterated to reporters on Tuesday. “We both are absolutely aligned that we need to make sure that if we’re going to do a deal, we need to make sure that’s a good deal for New Zealand.”
This comes after Luxon cast doubt over the Government’s LNG plans on Monday, telling Newstalk ZB, “for me, it’s coming down to the commercial business case …I’m just brutally going to make a decision on the commercial case. If it doesn’t stack up, we won’t be doing it”.
His comments were made less than a week after Watts had told reporters the Government wasn’t considering a pause and the LNG import terminal was proceeding to plan.
Watts, on Tuesday, said Cabinet has made "a definitive decision to build a LNG terminal".
"They have delegated the authority for the contract to be signed by the Minister of Finance, the Minister of Energy and also the Minister of Infrastructure. And that is subject to us looking at that contract, going through a procurement process."
As the prime minister outlined yesterday, Watts says, with any contract you want to look at the cost benefits and that it's a good deal for New Zealand.
When asked if he thought he had been undermined by Luxon’s comments, Watts said: “Absolutely not.”
"We're proceeding with the procurement process as planned. Cabinet [has] made that decision. What the PM (prime minister) has outlined clearly is any procurement process needs to make sure that we're getting a good deal and we're going to make sure we do that."
“We’re doing a procurement process to build a strategic LNG import terminal. The second conversation is procurement of that gas.”
He says the procurement for gas would be for winter 2028 “which is obviously not today, and that long-term contracting process will follow once the terminal is built”.
“We need the capability to import and then we need to do long-term contracting to get that gas when we need it, acknowledging we don’t know exactly when we are going to have a dry year but having that insurance policy gives us more options.”
When asked if he still had to persuade his colleagues that having a LNG import terminal was the way to go, Watts said the reality is that the impact of the Middle East crisis has brought a significant number of variables into all aspects of decision making for us as a country.
“My job as energy minister is to continue to ensure that we understand what are the pathways for us to get reliable, abundant and affordable energy for New Zealand households and businesses, and I’ll continue to do that."
'The world has changed'
Finance Minister Nicola Willis says "it's pretty obvious to everyone that the world has changed since that proposal first progressed through Cabinet".
"When we go to make those decisions as delegated ministers, we'll need to look at what's changed and see whether it still stacks up, so I'm certainly not going to be doing a pro forma signature on that one."
She says in the recommendations Cabinet agreed to, it makes clear that "we would need to continue to monitor the financial, commercial and practical case for the project".
"We're not bound to sign a contract. I would never sign a contract if it wasn't in New Zealanders' best interests. We still need to make that judgment."
Willis says when she has advice put in front of her, "I will be very, very careful indeed to ensure that it stacks up".
'Don't want another Interislander debacle'
Labour leader Chris Hipkins says if his party is in a position to scrap the LNG import terminal, they would do that.
“The one rider I would place on that, as I have right from the beginning, is I don’t want another Interislander debacle where it costs us more to get out of something than if we’d just gone ahead with it.”
“If we’re in a position where we can get out of it, then yes, we will,” Hipkins says.
On Tuesday afternoon, Hipkins repeated his party's stance, saying "we are absolutely determined that LNG is not the answer".
4 Comments
We’re doing a procurement process to build a strategic LNG import terminal. The second conversation is procurement of that gas.”
He says the procurement for gas would be for winter 2028 “which is obviously not today, and that long-term contracting process will follow once the terminal is built”.
That is what it has come to. It is called Cargocultism, as a philosophy.
I call it stupidity.
If S. Watts fails to get back into Parliament come November, wait and see if he scores a job with a company involved in LNG terminal construction (or procurement).
It must be automatic, that revolving door.
Hard to think of anyone going through it, with the brains to operate one.
Spend the money on a household solar subsidy.
Heck, add a levy/tax to fund it if that makes it more politically palatable
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.