Contact corporate communications manager Pattrick Smellie said the emphasis had swung towards Taranaki, which Contact and Genesis “were seriously looking at”, and away from Marsden Point in Northland as the likely site for any LNG regasification facility.

But compressed natural gas from Papua New Guinea, via Queensland, was a possible fall-back position if New Zealand’s gas supplies continued to decline or if LNG importation proved to be unworkable, according to Genesis Energy chief executive Murray Jackson.

LNG was only one of several options being considered by Genesis and Contact Energy to satisfy New Zealand's current gas market of about 150 petajoules per year, Jackson told an energy traders conference in Sydney recently.

Shipping PNG gas from Gladstone, Queensland to New Zealand as compressed natural gas was another option, he said. The gas would be sourced via the once the soon-to-be-approved PNG-to-Queensland pipeline.

Last month, Genesis corporate development manager Frank Geoghegan told the 2005 New Zealand Oil & Gas Expo in New Plymouth that both Genesis and Contact had been approached regarding importing PNG gas via Australia.

While such a project would be possible, and would avoid the upfront cost of a NZ$600 million LNG regasification plant, Geoghegan cautioned against any undue optimism.

"It would be quite brave to try to commercialise CNG imports," he said.

Geoghegan said the joint LNG feasibility study involved importing about one million tonnes per annum, about 60PJ, of LNG. This would involve about 11-14 tanker shipments a year from Western Australia, the Northen Territory or Indonesia.

CNG shipments would be far smaller than LNG shipments and trans-Tasman shipping times would certainly be quicker than from the Indian Ocean or Timor Sea. Small LPG tankers, carrying about 1000 tonnes or so of cargo, regularly ply their trade from Australia to New Plymouth, or from Taranaki to Micronesia.

Jackson told the Sydney conference that the LNG project timetable had been designed to coincide with the end of contracted gas supplies from the offshore Taranaki Maui field in 2009. But any decision on importing LNG would have to be made by 2007.

Further announcements on the LNG project timetable are expected soon.

The PNG Gas Project participants - Oil Search (54.2%), ExxonMobil (39.4%), Nippon Oil Exploration (3.4%) and MRDC (a PNG company representing landowner interests, 3%) – have recently said they expect a project sanction decision by early next year, with first gas to Queensland by 2009.