Simon Craddock: Taranaki Port CEO on the ability of the port to import Liquefied Natural Gas by 2027

Taranaki Port says it could be ready to import Liquefied Natural Gas by 2027, if Government passes new regulations.  

Cabinet's agreed to end the ban stopping the imports in efforts to boost energy supply and ease power bills.  

It will also speed up overturning a ban on oil and gas exploration, and will review the electricity market's performance. 

The port's Chief Executive Simon Craddock told Mike Hosking that the infrastructure to import LNG could be ready in 18 months,  

But, he says, it would take longer for vessels to be in the same position. 

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Episode Transcript

Speaker 1 (00:00):
So the government moving on this energy sector to try
and sure up the supply. Part of it is getting
the regulation out of the way so we can get
the LNG into the country. Port Taranaki's part of that
particular picture of the boss is Simon Kratick is well,
a Simon, very good morning to you.

Speaker 2 (00:12):
Good morning, Mike.

Speaker 1 (00:13):
Did it surprise you to learn yesterday from the minister
that's going to take them a year to get regulation
out of the way, And if so, why is that?

Speaker 2 (00:22):
No, it didn't surprise me. I mean, I think the
challenges that these projects are large and complex. What we're
doing here at the port is looking at how we
can play a role and stand up a solution that's
low cost and high capacity. But we'll just have to
wait for all of the industry to get together and
the enabling regulations to be put.

Speaker 1 (00:41):
In place, Which is what I was going to ask
Channel or is interested there? The Marsden people Genesis, I
think are also interested. Is everybody coordinating or you are
all in it saying well, this is an opportunity for
our bottom line, so we'll get stuck in.

Speaker 2 (00:54):
Well, I think there's definitely a coalition of the willing
who can see the benefits of LNG import. It seems
like the gas industry company is the logical coordinating body,
and I think that coordination really needs to kick off.
We're in contact with the major players that would be
interested in it, and we're looking at the benefits of

(01:16):
our location, and it's fair to say there's a range
of options, but we think our existing infrastructure, available capacity,
proximity the Male gas pipeline and potential connection to existing
underground gas storage means we've got a number of benefits
for our location.

Speaker 1 (01:34):
Indeed, if they said this afternoon, go how quickly could
you make it happen?

Speaker 2 (01:39):
Well, I think everyone naturally focuses on the port infrastructure
as part of the technical solution, but it's fair to
say the commercial considerations are very broad. So I think
our part of the physical infrastructure is actually relatively straightforward.
Allergy has changed a lot in the last twenty years.
Most of the infrastructure now floats on floating storage and
regas vessels, so the port infrastructure can be quite simple.

(02:02):
We think we can stand that up in around eighteen months,
but it's fair to say the lead time for vessels
could be longer.

Speaker 1 (02:08):
Okay, and so would you be in a better position
than many other ports like Marsden or Channel as they
call themselves, or any other port run the country to
make this happen quicker or not.

Speaker 2 (02:17):
It depends on scenario. We think we're well placed to
deliver on small scale LG rapidly. As you scale up
the port would require more modifications. But then you have
to go back and say, what's the market scenario that
we're trying to meet? How much gas, how often? What
flow rate? So those inputs are critical to a port solution.

Speaker 1 (02:37):
Have you got a view on that? Because what I
couldn't get out of the government yesterday and they didn't
seem to know, was once you get this up and running,
you presumably want to have it part of the mix permanently,
as opposed to a shortstop solution.

Speaker 2 (02:48):
Well, I think that those assumptions are critical. I think
I heard John Carnegie say this morning that everyone wants
to get a return on this investment. So the question
is what's the short term? Is this a stop gap
into solution for dry years, does it become more of
a feature of the gas market, and does it go
away once renewable stand up?

Speaker 1 (03:07):
I think those are the key question exactly while I've
got you. I don't know if it's anywhere. But does
methd X thing, for example, does that affect you badly?

Speaker 2 (03:15):
Yes, it does. Methanol's the biggest trade through the port,
so when methinx stops producing, that definitely affects our business. Yeah.

Speaker 1 (03:22):
So I'm looking at your result yesterday. You gave a
nice dividend to the local council and everything. So all
of these things are interrelated, and I'm not sure that
people necessarily understand that. So methodics selling something off to
somebody else, they're doing well, good on them, but you're not.
So there's a problem, isn't it.

Speaker 2 (03:39):
Well, yeah, it's a problem for us. We're obviously here
to serve our customers, so you know, we support whatever
our customers need to do. But it definitely does hurt
our business. And you know, we have to think off
to the medium term around what does our business look like.
It's going to have to transition as well, So we're
looking at supporting optional wind renewable project if they go ahead,
and various.

Speaker 1 (03:59):
Other things that offshore. When they talked about yesterday, how
real is that if it takes them a year to
get rid of regulation on L and G. How long
is it going to take them to build a massive
windmill out to see.

Speaker 2 (04:11):
Well, they're very large projects, giggle wat scale projects. They
take a long time. But I think you know, the
point we keep making making is if New Zealand wants
to have the option on doing offshore wind, what you
need is the right port infrastructure. We look around the
world and we see nothing happens to off sure wind
without ports. And I think that's up to debate whether
the pipeline bonds for renewables is going to be sufficient

(04:34):
or whether offshore will be required, but we certainly want
to stand ready if it is required.

Speaker 1 (04:40):
Road stuff, Simon appreciate the insight. Simon Cratick, who's the
the Port Taranaking CEO, endlessly fascinated by this. For more
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