New Zealand’s natural gas reserves have fallen to their lowest level since records began two decades ago, with proven and probable supplies down 23 percent over the past year, according to the latest annual petroleum reserves data released by the Ministry of Business, Innovation and Employment on 14 May.
The ministry’s report puts 2P reserves, the volume of gas operators expect to recover on commercial terms, at 731 petajoules as of 1 January 2026, a drop of 217 petajoules in twelve months. Roughly half of that fall reflected actual production over the year of 108 petajoules, with the other 109 petajoules coming from downward revisions to existing field estimates.
The biggest single change came at the Pohokura field off the Taranaki coast, which reported a 129 petajoule decrease, attributed by the operator to revisions of estimates and well underperformance rather than to the gas being physically unrecoverable. The Turangi field, operated by Greymouth Petroleum, now dominates remaining reserves, holding around 380 petajoules, or 51 percent of the country’s total 2P stock. The Mangahewa field provided one of the few bright spots, with some contingent reserves promoted into the commercial category.
Total contingent reserves, the gas known to exist but not currently commercially recoverable, fell three percent to 1,950 petajoules. Production over 2026 is forecast at 85 petajoules, around 15 percent lower than the forecast issued a year earlier, and well down on the 115.7 petajoules pulled from the ground in 2024.
The decline lands at a sensitive moment for the country’s energy market. OMV announced in April that it will end production at the Maui field, once the cornerstone of New Zealand’s gas system, by the end of the year. Methanex, the country’s largest single industrial gas user, said this month its New Zealand operations may close as a result of the looming supply shortfall. Eight of New Zealand’s gas fields are expected to wind down by 2036 on current production profiles, leaving a steepening cliff for generators that rely on gas to firm renewable supply when hydro lakes run low or the wind drops off.
Energy Minister Simeon Brown said the data confirmed the government’s view that falling supply was a direct threat to households and to industry. In a statement issued with the figures, Brown said gas was used to generate the electricity that kept the lights on when the sun was not shining, the wind was not blowing and the lakes were low. Without enough gas to back up renewable generation, he said, power bills would go up, factories would shut down and Kiwis would lose their jobs.
Brown pointed to the dry year of 2024, when wholesale electricity prices spiked above $800 per megawatt hour, forcing the New Zealand Aluminium Smelter at Tiwai Point to curtail production and pushing Methanex to idle plants to free up molecules for power generation. The minister attributed an estimated $5.2 billion hit to GDP in 2025 in part to the previous government’s 2018 ban on new offshore oil and gas exploration permits.
The coalition government has already moved to reverse that ban. Alongside the reserves release, ministers reaffirmed a $200 million Gas Security Fund to be deployed in partnership with industry, and confirmed that procurement is underway for a liquefied natural gas import terminal proposed for Port Taranaki. The government is also moving to enable carbon capture, utilisation and storage technology in an attempt to lower the cost of producing remaining domestic gas.
Resources Minister Shane Jones, quoted by RNZ, said the country needed a secure supply of gas to keep manufacturing competitive, while noting that more than 2,000 new homes had been hooked up to mains gas in the past year even as supply tightened. Climate advocates have questioned the wisdom of building permanent import infrastructure for a fuel the country is supposed to be moving away from, with one telling RNZ that the decision not to model price volatility in the proposed LNG facility business case was remarkable.
For the wider economy the squeeze is already showing up. Wholesale power prices have been firmer than usual through the past summer, retailers have lifted residential tariffs, and a string of Taranaki and Waikato manufacturers have signalled they are reviewing their gas-fired operations. Specialist coverage from Argus Media notes that Greymouth Petroleum’s Turangi field, now the country’s single most important gas asset, will be carrying an outsized share of the load for the rest of the decade.
The next test will be winter demand. With Maui winding down, Pohokura revised, hydro storage tracking close to average and a fresh Iran-driven spike in jet fuel and shipping costs still working through the import chain, the margin for error in keeping the lights on has rarely looked thinner. The full annual petroleum reserves release is available on the MBIE website.
What do you make of the choice between reopening offshore exploration and building an LNG import terminal at Port Taranaki? Are New Zealand households and businesses being asked to carry too much of the cost of a slower-than-expected energy transition? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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