Contact Energy said last Friday that it had applied to the High Court at Wellington to participate against the proceedings initiated by Methanex, which is seeking to delay the redetermination process of the remaining gas reserves from the offshore Maui field. Any reduction in entitlements will see Methanex progressively close its Taranaki production facilities, perhaps from as early as next year.

Contact chief executive Steve Barrett said his company believed it was prudent and in the company's interests to also join as a party to this action. "Contact opposes the Methanex application to delay the redetermination process," Barrett, who is also the company's managing director, said from Wellington.

Fellow gas wholesaler and power generator Natural Gas Corporation has already said it doesn't support the Methanex action and will be asking for the redetermination process to be allowed to proceed.

"The fight has started already and, now that Contact wants to be party to the proceedings, may well get worse," said one industry commentator.

If the redetermination is swift and the Methanex entitlement adjusted to maintain its percentage of the revised reserves, then there will be sufficient gas for NGC and Contact after the Methanex amount of contracted Maui gas falls to zero in 2006.

However, if Methanex keeps taking at its current contract quantity into next year then there won't be enough for NGC and Contact to cover all their requirements and their pre-paid gas through to 2009.

Methanex, this country's largest single user of Maui gas, is seeking an urgent hearing of its application for an injunction to temporarily halt the redetermination process.

The methanol manufacturer claims the government and the field owner - Maui Development Ltd (MDL) - have provided insufficient information for it to be able to accurately assess the amount of remaining recoverable gas in the Maui field. Asia-Pacific managing director Bruce Aitken has said Methanex wants a quick, but also fair and accurate resolution to this critical matter.

However, MDL chairman Lloyd Taylor has said the Methanex-initiated legal proceedings have no merit and MDL will be defending its actions.

The New Zealand government - which buys gas from MDL and on-sells it to Methanex, NGC and Contact Energy - is named as the first defendant in the court case and MDL as the second defendant.

Last November MDL said total expected recoverable Maui reserves, from the developed parts and easily accessible undeveloped parts within the mining licence, were now expected to be only about 3827PJ and not the 4085PJ on which the original Maui contract between MDL and the government was based. There is now less than 1 tcf of accessible gas left.