Todd Energy yesterday said its subsidiary Todd Taranaki would be looking for bids on the 100PJ of gas it would have available from early 2004. According to Crown Minerals, this is virtually all the estimated recoverable gas from both fields.

Managing director Richard Tweedie said the sale would help meet market demand for gas and that Todd was inviting interested parties which consumed more than 1PJ of gas a year to take part in a sales process to auction the gas over the next month.

Methanex NZ has been managing to keep one of three methanol trains operating since early this year thanks to supply contracts with Todd, for McKee and Mangahewa gas, and with NGC, for some Kapuni gas. However, all contracts expire either late this year or early next, leaving Methanex in the almost precarious position of having no contracted gas from 2004.

With confirmation of Todd's competitive bidding process, Methanex will be forced to compete with electricity generators such as Contact Energy and Genesis Power, which are capable of paying the higher gas prices being touted in the marketplace.

While Methanex used to pay about $NZ2.00-2.50 per Gigajoule for its Maui gas, it will now have to pay perhaps double that to have any chance of securing gas for next year. Rumours are that Todd Energy sees a $NZ6.00 price for gas heading north from Taranaki as a realistic proposition.

Todd Energy is New Zealand's largest domestically owned energy company, with interests in the Maui, Kapuni, Pohokura, McKee and Mangahewa fields. Tweedie said it also had an active exploration program for further gas.