NGC's LPG retailing business, On gas, has concluded an agreement to purchase a 4km reticulated gas network from networks developer TMU Services and is installing a bulk LPG storage facility and related equipment to supply the system.

The newly-built network will initially supply reticulated LPG to commercial customers in and near the Wanaka town centre, many of whom currently receive their LPG in 45kg cylinders.

Reticulated LPG supplies are expected to commence within two months, subject to satisfactory planning consents for the bulk installation.

The purpose-built LPG bulk installation will comprise below ground storage vessels, with a total storage capacity of 26 tonnes, gas conditioning equipment, and an LPG cylinder filling plant to supply the Wanaka community direct, instead of from the present Christchurch or Dunedin facilities.

The bulk installation and the LPG cylinder business will be operated by Wanaka-based Alpine Gas and Oil, a local partner for On gas and a supplier of LPG and other fuels to the region. On gas will be looking to expand the pipeline network to supply other areas.

"This is a significant step in the further development of On gas' LPG business in the South Island, and in particular represents an opportunity to further develop our growing business in Central Otago,” said NGC chief executive Phil James.

"Demand for LPG in this region has doubled in recent years, and is driven by the convenience, efficiency and clean burning properties of LPG.

James said pipeline networks were an efficient means of transporting LPG to concentrations of customers, and were becoming more common in New Zealand as the LPG market grew.