Maui gas field to wind up production at the end of 2026 a year earlier than the government had forecast
Austrian-based energy company OMV has signalled that production at New Zealand’s largest gas field, the Maui field off the Taranaki coast, is expected to wind up at the end of 2026, bringing forward by about a year the timeline most government officials had been working to and intensifying questions about the future of the country’s industrial gas users.
The disclosure was buried in OMV’s latest annual report, which noted the company had informed the government that gas production at Maui was expected to finish at the end of this year. RNZ first reported the disclosure, and PwC’s Energy team managing director Aaron Webb told the broadcaster the field’s decline had been long signalled, with officials previously forecasting a likely end to production in 2027.
“Maui’s closure is another sign that New Zealand is now transitioning away from gas,” Webb said. He noted that one of the key issues was whether Taranaki-based methanol producer Methanex would leave the country as a result of the announcement, given how closely the two operations are tied together. “Methanex being a key purchaser of Maui’s gas, so we may see a lot smaller gas market in the next year.”
In a statement to RNZ, an OMV spokesperson said the field, which has been in operation for nearly fifty years, was approaching the end of its productive life, although no final decisions had been made on timing. “Despite substantial investments in recent years aimed at extending the field’s viability, official disclosures indicate a significant decline in gas output,” the spokesperson said.
The Maui field has been the backbone of New Zealand’s gas system since it came online in 1979, supplying both household reticulated gas networks and the heavy industrial users that grew up around it in the 1980s. Methanex, which operates two methanol plants in Taranaki, has been the single largest gas consumer in the country for decades, exporting methanol to Asian markets and providing several hundred direct jobs in the region. If Methanex were to confirm a closure or relocation in response to dwindling Maui supply, the impact on Taranaki would extend well beyond the company’s own payroll, taking in contractors, ports, road freight and a long supply chain of local engineering firms.
The closure also has implications for the wider electricity market. Genesis Energy’s Huntly power station, which uses gas alongside coal as a backup fuel during dry years when hydro generation falls short, has already had to lean more heavily on imported coal as gas reserves have tightened. Interest.co.nz has noted in recent coverage that abundant rainfall at the country’s hydro lakes has lifted renewable generation to record levels, but the gas system still acts as the shock absorber for cold winter peaks. With Maui exiting earlier than expected, the question is whether the smaller Pohokura and Kupe fields, plus the new in-fill drilling at Maui A that OMV says has almost doubled 2021 production levels, can stretch the supply curve until further renewable capacity arrives.
The decision lands in a year where the country’s energy outlook has already been reshaped by external shocks. Government officials are spending $21.6 million to shore up diesel reserves at the former Marsden Point refinery as global supply remains fragile, and the Treasury has signalled that the oil price spike linked to Middle East tensions will force a rethink of parts of the Budget. A faster-than-expected end at Maui adds another layer of uncertainty for energy-intensive manufacturers and for the Reserve Bank’s inflation forecasts, since gas prices feed through to electricity, fertiliser and food processing costs.
The Maui announcement is not the only piece of bad news for OMV in New Zealand. Jadestone Energy and OMV have agreed to terminate a deal under which Jadestone was to acquire 69 percent of the Maari oil field off the Taranaki coast, leaving questions about who will eventually take on the decommissioning liabilities for the ageing offshore infrastructure. A hearing was due to start that could allow a boost in the search for gas at the field, but even successful exploration would be unlikely to deliver new supply within the timeframe Methanex would need to keep both of its plants running at full tilt.
For policymakers, the early Maui exit underlines a tension that has been growing for several years. The government has restated its commitment to a low-emissions transition, but it has also reopened the door to oil and gas exploration in an effort to stop industrial users heading offshore. Aaron Webb’s comment to RNZ that the closure is “another sign that New Zealand is now transitioning away from gas” sits alongside ministerial language about the need to keep gas flowing for at least another decade. Both statements can be true at once, but the gap between them is what will play out in pricing, contracts and capital decisions over the next eighteen months.
Households are unlikely to feel an overnight shock. Reticulated gas customers in the North Island are served by long-term retail contracts, and the Gas Industry Company has been working on managed-decline scenarios for several years. The bigger near-term effects will fall on industrial customers locked into supply agreements that assumed a 2027 or later Maui exit, on Taranaki contractors who service the field, and on regional councils that have planned roads, rates and infrastructure on the assumption of a slower wind-down.
The signal from OMV is a reminder that New Zealand’s biggest energy transition decisions are increasingly being made in corporate boardrooms in Vienna, Calgary and Singapore rather than in Wellington. With the Maui field nearing the end of its productive life, the country has a relatively short window to decide whether it wants to replace those molecules with new domestic gas, with imported LNG, or with electrification of the industries that currently rely on them.
What do you think the end of Maui means for Taranaki and for New Zealand’s energy plans? Should the government push harder on electrification, or back further exploration to keep large industrial users in the country? Leave your thoughts in the comments below.