en.Wedoany.com Reported - The New Zealand government announced on Tuesday that it has selected two suppliers for a proposed liquefied natural gas (LNG) import facility. The facility is a key component of the country's plan to secure electricity supply during drought years, aiming to address challenges posed by declining domestic natural gas production and rising energy costs.

Energy Minister Simeon Brown stated that the government plans to advance the two bidding companies to the request-for-quotation stage and sign contracts with the preferred supplier later this year. The facility is expected to become operational in 2028. However, the government has not yet publicly disclosed the specific details of the shortlisted bidders.

Rising energy costs continue to weigh on New Zealand's economy, with inflation also climbing. These two issues became focal points ahead of the November election. The government's "center-right" said that when wind and solar power output is insufficient and hydro lake levels are low, the terminal will provide a backup fuel source for power generation, helping to avoid wholesale price spikes and supply shortages.

Brown said the government is still studying the funding approach for the project, including discussions with major power companies. However, he made it clear that the project costs will not be covered by charging household electricity bills.

The LNG project is part of broader reforms to the electricity market, aimed at forcing large power users and generators to plan earlier for winter shortages. The Ministry of Business, Innovation and Employment launched consultations on Monday regarding a new "winter energy reliability obligation." This obligation would require major electricity buyers to secure backup supply ahead of predicted dry winters, while also requiring generators to demonstrate they have stable fuel on hand when water storage is depleted.

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