Natural gas production in New Zealand is expected to drop below demand, according to the latest oil and gas reserves
data released by the Ministry of Business, Innovation & Employment (MBIE).This graph shows the factors that contributed to the reduction in natural gas reserves between 1 January 2023 and 1
January 2024, and their relative sizes.
“For at least the next three years, data shows New Zealand’s natural gas reserves will produce 10 petajoules (PJ) less
than recent demand levels,” says MBIE Markets Manager Mike Hayward.This graph shows gas usage by sector over the past ten years. Industrial use has been split into energy use (for
example, burning gas to heat boilers or the like) and non-energy use (for example, using gas as a feedstock in chemical
processes).
“New Zealand has used around 150 PJ of natural gas per year for the last two years. While New Zealand holds 8.7 years of
natural gas in useable reserves, field operators only expect to extract up to 140 PJ each year for the next three
years.”This graph shows historical net gas production and forecast future production based on production profile data in this
release.
‘Reserves’ refer to natural gas which operators expect to extract over the lifetime of the field, given technical and
economic constraints.
“The amount of natural gas in New Zealand’s reserves has decreased by 335 PJ or 20% between 1 January 2023 and 1 January
2024, to 1,300 PJ,” says Mike Hayward.
“44% of this reduction is due to gas extracted and used over the course of 2023. The remaining 56% is a result of
revisions to reserves figures from gas field operators. Operators revise their reserves figures as they get a better
idea of exactly how much gas exists in – and can be extracted from – their fields.”
This year’s revisions are split fairly evenly between downgrades to contingent resources, where operators believe the
gas is there, but it’s too hard to extract (100 PJ), and revisions to existing figures, where operators believe there is
less total gas than previously thought (88 PJ).
“New Zealand’s natural gas reserves have been steadily declining since 2019 and are expected to remain on this pathway
unless there are new discoveries or innovation which enables commercially feasible production from contingent
resources,” says Mike Hayward.This graph shows gas usage by sector based on 2019-2023 gas usage data. Industrial use has been split into energy use
(for example, burning gas to heat boilers or the like) and non-energy use (for example, using gas as a feedstock in
chemical processes).
“Limited gas supply is already impacting industrial users: for example, Methanex’s reported production at its Motunui
plant was down 31 per cent in the March 2024 quarter compared to the same quarter last year.”
Of all the gas used in New Zealand in 2023, the majority was used by the industrial sector, either being burned for heat
(35% of all use) or being used as a feedstock (26%) in factories. Around 29% of gas use was for electricity generation,
and the remaining 10% of use represented use by households, schools, hospitals, and other businesses.
The full oil and gas reserve data can be read on the MBIE website here: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-statistics/petroleum-reserves-data
Notes:As of 1 January 2024, 2P Reserves hold 1,300 PJ and 2C contingent resources hold 1,827 PJ2P Reserves are an estimate of the amount of gas which permit or licence holders expect to produce commercially from any
field.2C Contingent Resources are an estimate of the amount of gas which permit or licence holders estimate they could
produce, but choose not to as it is not commercially viable.A petajoule (PJ) is a measurement of the amount of energy contained in a fuel, and is a useful way of measuring how much
gas is produced or consumed on an annual basis.MBIE publishes oil and has reserve data annually.