The country’s two largest gas users, Contact Energy and Genesis Energy, believe importing LNG will prove to be the best alternative should explorers fail to find enough indigenous gas to replace the faltering Maui fiueld.

Both have said that shipping CNG is unproven technology and there is no established trading market for CNG. In addition, CNG does not provide the volumes or flexibility offered by the established international LNG market.

But other companies, such as Todd Energy, say CNG can be piped directly into the North Island natural gas grid network, thus avoiding the need for a NZ$600 million LNG regasification terminal. CNG would also give users the ability to switch back to indigenous gas if more was found, instead of locking them into long-term LNG supply contracts.

However, Stone believes there are no simple answers to the complex LNG-or-CNG question.

“There are far more complex technical requirements for CNG than for LNG, although I have been told that the delivered costs of one option are likely to be not materially different to the costs of the other,” he said.

“You would have more flexibility with CNG and the spot market that may develop in eastern Australia regarding future supplies from Papua New Guinea. However, the east coast pipeline system is also heavily utilised. So, would New Zealand be able to get the necessary volumes delivered when needed?”

Stone said both options would require additional infrastructure to be built to store the imported gas.

In addition, some gas, perhaps a day or two’s supply, could be “stored” as linepack in the Maui pipeline, the country’s largest, although there would also be charges for that.

LNG carriers could each bring in 5-6PJ of gas at a time, which would be enough to satisfy New Zealand’s gas needs for about two weeks. CNG tankers might only be able to bring 0.5-1PJ of gas.

“So, CNG may be more benign, but not much cheaper or easier than LNG,” Stone said.

Contact and Genesis are nearing the end of their joint feasibility study into importing about one million tonnes per annum (about 60 petajoules) of LNG from Western Australia, the Northen Territory or Indonesia, should there be insufficient domestic gas later this decade.

Earlier this week Todd Energy said Papua New Guinean parties had approached it regarding possible CNG imports from that country to supplement indigenous gas supplies when the Maui field runs dry in 2010.