New Zealand Energy Companies Sign Term Sheet for Strategic Energy Reserve

By Stephen Nakrosis

Genesis Energy said it joined three other New Zealand energy companies to sign a non-binding term sheet to establish an strategic energy reserve centered on Huntly Power Station.

Mercury NZ, Meridian Energy and Contact Energy joined Genesis in signing the agreement. The four companies will explore a proposal to keep capacity from retiring Rankine units on the market, and to establish a strategic fuel reserve to support supply security. The proposal is expected to cover a term of 10 years, and the parties intend for the proposal to be in place from Jan. 1, 2026, Genesis said.

One of the Rankine units is slated to retire in 2026, with two others expected to be retired early in the next decade.

The move comes in response to market conditions during the winter of 2024, when New Zealand experienced a faster than expected decline in its natural gas supply, along with low hydro lake and low wind conditions, Genesis said.

In February, the four companies signed a non-binding agreement to investigate the potential for the facility's units. Huntly power station has a capacity of 1200MW, Genesis said.

Write to Stephen Nakrosis at [e-mail]

(END) Dow Jones Newswires

06-18-25 1742ET