Genesis Energy yesterday said it would not be paying any dividend to the government from its after-tax profit for the June 2004-05 financial year, although it had paid a NZ$32 million dividend on the previous year’s profit of NZ$80.1 million.
The 2004-05 result included a one-off NZ$7.2 million gain from the sale of 50% in the offshore Taranaki Kupe oil and gas field to Australian major Origin Energy.
Company chairman Brian Corban said the net profit was a strong result considering the rising cost of fuel, which rose an average 13% to NZ$212 million, and Genesis’ extensive development programme.
Higher generation at the dual-fuelled (gas or coal) 1000MW Huntly power station was offset by higher operating costs, including higher gas prices, increased consumption of coal and increased maintenance expenses. The average cost of fuel rose 13% from the previous year with total fuel costs reaching NZ$212 million.
“We have been running Huntly hard to meet the growing demand for electricity, with four 250MW generators on full output for six months over winter,” Corban said.
"Our new 385MW Huntly combined cycle gas turbine will provide welcome relief when it is commissioned in December 2006."
Genesis Energy imported 900,000 tonnes of coal from Indonesia over the 12-month period due to falling production at NZ coal mines.
Chief executive Murray Jackson said Genesis had a busy schedule ahead of it, including the development of the offshore Taranaki Kupe gas-condensate field, testing of the onshore Cardiff gas prospect, and looking at potential wind farm opportunities.
As well as building e3p (Energy Efficiency Enhancement Project) alongside the existing Huntly plant, Genesis had recently secured the option to buy an 18-hectare site in the Rodney district north of Auckland with the aim of having a 360MW gas-fired plant operating there by the 2008-09 summer.
Genesis and Contact Energy were also making good progress with their joint study into the feasibility of importing LNG into New Zealand.
They had narrowed the preferred location of the NZ$600 million LNG regasification plant down to three coastal sites - Contact’s New Plymouth power station site at Port Taranaki, the nearby mothballed Methanex Motunui methanol complex, or the Marsden Point refinery site south of Whangarei.
Jackson said there would be less work in placing a terminal at the port than at the Methanex site, and one of those two Taranaki options seemed more likely given the apparent lack of interest from the Marsden Pt oil company owners – Shell, Mobil, BP and Caltex.
Genesis and Contact should decide on a site before Christmas, apply for resource consents next year, and make a decision on whether to import LNG by mid-2007.
Jackson said it would take another three months to determine Cardiff gas reserves. If the prospect proved commercial then gas from the field would be used at the proposed Rodney power station. Genesis owns 40% of the Cardiff deep prospect and has rights to buy all gas from Eocene-aged reservoirs.
New Zealand could develop 1200MW of wind power and 1200MW of gas-fired power plants.
"That puts us in pretty good shape over the next 10 years," Jackson said.
