"Our first call for registration was rather broad; now we are embarking on the second phase and have called for requests for proposals that will take us down the critical path of selecting a preferred location and refining costs," Contact business development manager Frank Geoghegan told EnergyReview.Net.
"This is the economic evaluation of the entire value chain and will include such things as likely landed cost of LNG, environmental effects and a preliminary generic engineering study."
"We hope to have engaged a party before Christmas," Geoghegan added.
Last month Contact and Genesis, now this country's largest gas users, announced they were investigating the feasibility of developing a multi-million-dollar LNG receiving facility in New Zealand.
Then, earlier this month, Contact spokesperson Pattrick Smellie told ERN that more than a dozen international parties had registered their interest in the supply of LNG and/or the construction of the necessary LNG infrastructure.
Contact corporate development manager David Hunt said the offshore Taranaki Maui gas field - which had previously supplied about 30% of this country's total primary energy needs - had been both a blessing and a curse.
"We have been through the blessing phase, now it's the curse - the wind down of Maui which is happening faster and earlier than anticipated.
"We see some potential for renewables, but not as much potential as the government is forecasting, and there will still be a gap which will have to be met by fossil fuels, indigenous gas or coal, or imported LNG.
"Thermal energy has kept New Zealand's head above water in terms of meeting growing electricity demand and we cannot afford to turn our backs on thermal."
Hunt said "wishful thinking" - simply assuming that sufficient new gas discoveries would be made soon enough to prevent possible widespread power shortages later this decade - was not the answer.
New Zealand's fast-changing energy situation meant LNG was now an option. "If you had asked us about LNG two years ago, we would have discounted it."
LNG and other options - Contact's earlier coal study showed coal and LNG to be roughly equivalent given a mid-range ($NZ12.50 per tonne) carbon tax from 2007 - needed to be fully investigated.
The companies' proposed LNG study would also look at such things as whether a large LNG receiving terminal, capable of handling 200 PJ or more a year, would be best, or a smaller one, handling only 50-60PJ.
Fixed short-term contract prices versus long-term contracts would need to be studied, as would the best deepwater port. Presently, Marsden Pt, south of Whangarei, and Port Taranaki, New Plymouth, were among the top three, together with "perhaps something closer to Auckland".
It was understandable explorers, such as Indo-Pacific Energy, were worried that LNG could effectively stifle the hunt for more indigenous gas. "Even wind turbine manufacturers are worried about LNG," said Hunt.
"All of these energy sources are potential options - choices need to be made on hard facts, not guesses. At the moment, there seems to be a view that LNG is an all or nothing solution which, if exercised, will curtail other choices. It is much too early to be making such assessments. We need to get the study done to determine cost, lead time and minimum economic scale."
Genesis and Contact have said New Zealand faces a gas supply shortfall from 2008-2010, though ERN believes this could occur as early as 2005-06 if the previously largest user, Methanex, manages to keep its Taranaki methanol plants running at only part capacity.
