PMP 38138 · Taranaki, New Zealand

A gas reservoir, repurposed three kilometres beneath Taranaki.

The Tariki Gas Storage Project will convert a depleted onshore gas field into 25–40 Bscf of secure underground storage — flexibility for an energy system facing dry years, supply decline, and an uncertain transition. Final investment decision targeted Q4 2026, first storage operations Q4 2027.

Working capacity (target)
25–40Bscf
Reservoir depth
~3.0km
Formation
Tarikisandstone
Historical production
~50Bscf gas
0 m · surface
~500 m
~1500 m · cap rock
~3000 m · reservoir
basement
Storage zone
Tariki sandstone
~3 km deep · porous, sealed
by overlying cap rock
01 · The challenge

New Zealand's gas system is short on flexibility, and getting shorter.

Domestic gas production is declining faster than expected. Hydro lakes run dry. Methanex is curtailing demand. The grid is leaning harder on gas peaking just as the gas itself becomes scarce. Storage is the missing link.

Gas production
−20.9%
Drop in NZ natural gas production in 2024 versus 2023 — domestic supply is contracting year on year, with reserves down 27% in a single year.
Aug 2024 peak
$800/MWh
Wholesale electricity prices during the August 2024 supply crunch, driven by low hydro and constrained gas. Storage flattens these spikes.
Existing storage
~7PJ
The working capacity of Ahuroa — currently New Zealand's only underground gas storage facility, fully contracted to two parties. The system needs more.
02 · The project

Repurposing a known reservoir, with a known analog next door.

The Tariki gas field produced ~50 Bscf of gas before depletion. Studies indicate it can safely store between 25 and 40 Bscf — and the immediately adjacent Ahuroa field, built on the same overthrust Tariki Sandstone, has been operating successfully as storage since 2011.

TGSP repeats a workflow already proven in New Zealand. Ahuroa was converted to storage in the same Tariki Sandstone formation, at similar depth, and has been operating reliably for over a decade. The geology is well understood; the engineering pathway is established.

The reservoir is sealed by an overlying cap rock of low-permeability mudstone. Gas is injected when prices and demand are low, and withdrawn through dedicated wells when the grid needs flexibility — during dry hydrology, winter peaks, or unplanned generator outages.

Once commissioned, the facility integrates with the existing gas transmission network and can deliver gas to industrial users, electricity generators, or both — depending on which market is paying the most that day.

The analog

Ahuroa Gas Storage — the same geology, already operating

The adjacent Ahuroa facility was sold by Contact Energy in 2017 for NZD $200 million as a working asset with ~18 Bscf capacity. TGSP targets up to 2× that working volume in the same formation.

PermitPMP 38138
Permit statusExtended 5 years
OperatorNZ Energy Corp
LocationTaranaki Basin
Reservoir formationTariki Sandstone
Reservoir depth~3,000 m
Historical production~50 Bscf
Target working capacity25–40 Bscf
Equivalent in PJ~26–42 PJ
AnalogAhuroa (adjacent)
ListingTSXV: NZ
03 · Value scenarios

Value moves with the market. The need does not.

A gas storage asset earns differently in different conditions — quietly profitable in normal years, transformative in tight ones. These scenarios bracket what a contracted, fully operational TGSP could deliver to the New Zealand energy system, scaled from observed Ahuroa economics.

SCENARIO A

Normal year

Average hydrology · stable gas prices
$60–110M
Annual system value · NZD
Drivers
  • Seasonal price arbitrage on ~6–8 PJ cycled
  • Modest peaking dispatch from stored gas
  • Hedge book firming premium
SCENARIO B

Dry year

Low hydro · gas supply constrained
$250–500M
Annual system value · NZD
Drivers
  • Wide seasonal price spreads ($25–45/GJ)
  • Sustained peaking dispatch at $400–800/MWh
  • Premium for firm supply contracts
  • Insurance value against forced outages
SCENARIO C

Wet year

Abundant hydro · gas demand soft
$15–35M
Annual system value · NZD
Drivers
  • Storage fees from contracted parties
  • Low arbitrage spread, minimal peaking
  • Optionality preserved for future years
$300–500MOperational enterprise value · NZD
The estimated operational enterprise value of TGSP scales directly from the Ahuroa precedent — $200M for ~18 Bscf in 2017, against TGSP's 25–40 Bscf target in a market with materially higher gas prices and tighter supply. Scenarios above represent system value delivered, not company revenue alone; the operator captures this through capacity reservation fees, throughput tariffs, and contracted upside.
04 · Project status

Cleared to build. Moving toward FID.

TGSP is now through the technical and regulatory de-risking phases. With the PMP extended and the geological work complete, the project is progressing toward final investment decision in Q4 2026 and first storage operations in Q4 2027.

2022–2023

Concept study and geological assessment Complete

Reservoir modelling, storage capacity studies, and confirmation that the Tariki Sandstone behaves analogously to the Ahuroa storage reservoir.

2024

Technical briefing and risk register Complete

Full workshop documentation synthesising reservoir modelling, geological data, and operational risk for stakeholder review.

2025

PMP 38138 extended by 5 years Complete

Regulatory approval secured under the Crown Minerals Act. The extended permit provides the runway required to progress the storage development through construction and into operations.

2025–2026

Customer offtake and front-end engineering In progress

Securing capacity reservation agreements with gentailers and industrial gas users, alongside FEED for wellsite facilities, compression, and dehydration. Consistent with the fully-contracted Ahuroa precedent.

Q4 2026

Final investment decision Target

FID upon completion of front-end engineering design, customer contracts, and financing. Immediate project sanction into construction phase.

2027

Construction and commissioning Planned

Wellsite facilities, compression, dehydration, and connection to the gas transmission network. Wells worked over for cyclic injection and withdrawal duty.

Q4 2027

First storage operations Target

Initial gas injection cycle, followed by first withdrawal into the New Zealand gas transmission network.

05 · About the operator

A focused onshore E&P operator in Taranaki.

New Zealand Energy Corp is a TSX Venture–listed onshore exploration and production company operating across the Taranaki basin, with additional coal seam gas activity in Queensland. The company holds substantial permitted acreage in New Zealand's only producing sedimentary basin, alongside a 50% stake in the Waihapa production station, allowing rapid tie-in of near-term production to market.

TGSP is the company's flagship strategic development — leveraging existing reservoir and operational knowledge in the basin, deep expertise in pressure transient analysis and material balance, and the directly applicable engineering precedent of the adjacent Ahuroa storage facility.

The company is engaging with Iwi, the Taranaki Regional Council, WorkSafe, and central government agencies as part of the project's social and regulatory pathway.

Company snapshot

Listing
TSX Venture Exchange (TSXV: NZ)
Operations
Taranaki, New Zealand · Queensland, Australia
Producing assets
Copper Moki · Waihapa-Ngaere · Tariki
Development asset
Tariki Gas Storage Project (PMP 38138)
Website
newzealandenergy.com

Interested in TGSP capacity, partnership, or investment?

Get in touch with the New Zealand Energy Corp team through the corporate website.

Contact NZEC