Finance Minister Michael Cullen and Energy Minister Pete Hodgson released contract information yesterday but withheld parts they said were commercially confidential.
Documents released revealed Genesis has negotiated a NZ$675m revolving credit facility with Westpac after a competitive tender process. But the documents do not specify how much money the government has allocated to the risk-sharing arrangement.
According to the deed on the risk-sharing arrangement, the Government considered the Genesis combined-cycle station, known as e3p, particularly important in increasing the amount of electricity generation available to offset projections of continued rising demand.
"The Crown is seeking to help reduce investment uncertainty in a period of adjustment to new sources of gas by encouraging the construction of Huntly e3p (which is) . . . uniquely placed to deliver on the Crown's objectives. Accordingly, the Crown is prepared to assume certain risks it would not otherwise be prepared to assume," the deed said.
The agreement lasts either until Genesis has proven contracts for adequate gas supplies or 10 years, whichever is the sooner.
Genesis chief executive Murray Jackson told EnergyReview.Net this morning that he wanted to start building e3p before the Kupe and Pohokura gas fields had come onstream and had needed some assurance of the government underwriting the project.
"I'm committing Genesis to a new investment ahead of the new gas fields coming onstream. That’s a pretty good, bold plan which meets the requirements of the bankers.”
Manufacturing work on the turbine had started in Japan and construction workers were already onsite at Huntly.
The NZ$520 million, 385MW plant is due to come onstream at the end of 2006, a few months after first gas is scheduled from the nearshore Taranaki Pohokura field but before Kupe is developed in 2007. Genesis has gas supply contracts with both joint ventures.
Earlier this month Contact Energy chief executive Steve Barrett said he welcomed e3p from a national security of electricity supply perspective, though concerns remained about the implications of the government underwriting the project.
Meanwhile, Jackson has revealed Motunui - the site of the proposed Pohokura production station alongside the twin Methanex methanol units - is a third option for any LNG importation terminal.
The LNG feasibility report done for Genesis and Contact by multinational energy support companies Kellogg Brown & Root and Poten & Partners had identified Northland’s Marsden Pt, Port Taranaki and Motunui as possible sites for any LNG importation terminal, said Jackson.
A floating jetty or breakwater would be needed at Motunui, while a 150km pipeline would have to be built from Marsden Pt to Auckland. Now there was open access to the strategic Maui pipeline, regasified LNG could be piped north, from either the port or Motunui, in that pipeline to near Huntly.
However, Jackson warned the issues were complex and Genesis and Contact still had to report on the LNG study. Their report was expected to be released by the end of the month.
