Under the 15-month contract - from June 2006 to September 2007 - NGC will supply about 7 petajoules per annum to the Ballance ammonia-urea plant at Kapuni, with a provision for a further term to be negotiated.
The Ballance plant is sited next to NGC's gas processing facilities at Kapuni.
“The gas supply agreement reflects careful management of NGC's gas purchase profile and covers a period when a substantial amount of gas will become available to NGC from the Pohokura field,” said Vector's acting divisional CEO for gas, Michael Cummings.
Ballance site manager Len Houwers said the new contract and higher global prices for urea gave more confidence in the manufacturing facility's future.
World urea prices of about US$250 per tonne enabled Ballance to pay more for its gas, but Houwers declined to specify gas contract prices.
Ballance chief executive Larry Bilodeau said the NGC contract – which starts when the current 12-month contract with Contact Energy ends - meant Ballance had almost two years of gas supply guaranteed.
“With the level of gas exploration underway generating considerable optimism in the market, we have high expectations of maintaining the viability of this plant in the long-term," he said.
