Introduction
Company History / Ownership
12.1 Natural Gas Corporation Limited was established in 1967 as a state-owned entity for the purpose of buying, processing and wholesaling Kapuni natural gas. In 1969, gas transmission pipelines were constructed by Natural Gas Corporation linking Kapuni with Auckland and Wellington, and in 1970 Natural Gas Corporation commenced transmitting gas in bulk following the completion of the Kapuni Gas Treatment Plant (KGTP).
12.2 In 1978 the Government established Petroleum Corporation of New Zealand (Petrocorp) as a state-owned company. Natural Gas Corporation in turn became a wholly owned subsidiary of Petrocorp. Petrocorp became a publicly-listed company in 1987 following a 30 per cent sell down by the Government. By 1988 Fletcher Challenge had acquired 100 per cent of the shares in Petrocorp.
12.3 In 1991 Natural Gas Corporation Limited acquired Natural Gas Corporation of New Zealand Limited and other associated companies. In 1992 Natural Gas Corporation Holdings Limited was established as the new parent company and acquired Natural Gas Corporation Limited. In 2002 Natural Gas Corporation Holdings Limited formally changed its name to NGC Holdings Limited (NGC) and adopted its current corporate brand. NGC is majority owned (66.05%) by the Australian Gas Light Company (AGL) and its wholly owned subsidiaries, with the public and institutions owning the remaining 33.95%. Vector has recently made an offer to buy AGL's shareholding in NGC. The Commission has assessed NGC on the basis that it operates as a company separate from Vector's operations.
Extent of Vertical Integration
12.4 NGC's main business activities today are gas transmission and distribution, accounting for approximately […] of assets and […] of revenues. NGC transports natural gas from Taranaki to locations throughout the North Island, and from the northern end of the Maui pipeline at Rotowaro to the north of the North Island. NGC's gas transmission network is made up of four main pipeline systems and is approximately 2,200km in length. NGC also owns and operates medium and low pressure gas distribution networks which distribute natural gas from transmission pipelines to end customers.
12.5 NGC owns and operates the KGTP in Taranaki, which treats and conditions raw gas so that it meets retail market specifications. NGC sells LPG, natural gasoline and carbon dioxide, produced as by- products of the treatment process.
12.6 NGC has wholesaled between […] and […]PJ of gas per annum over the last three years to non-affiliated gas retailers, independent power producers, petrochemical producers, approximately 500 large industrial and commercial sites throughout the North Island and for NGC internal purposes.
12.7 NGC has discontinued its activities in the gas retail mass market (sold to Genesis Power Limited in 2002), but continues to retail gas to commercial/industrial consumers with annual consumption above […].
12.8 In 2001 NGC withdrew from the electricity retail market (selling its South Island electricity customers to Meridian Energy and the North Island customers to Genesis power), and in 2002/2003 NGC withdrew from the electricity generation market (with sales of its interests in the Southdown Generation Station and Rotokawa Geothermal Station output to Mighty River Power, the Taranaki Combined Cycle Power Station to Contact Energy, and the Cobb Hydro Station to Trustpower). However, NGC continues to hold a small interest in electricity generation through its joint venture interest in the Kapuni Cogeneration Station (KCS). The KCS is a 50:50 joint venture between NGC and Bay of Plenty Electricity (which Todd Energy Limited has a 50% interest in) and has a rated output of 25MW of which 20MW is exported to the national grid.
12.9 NGC also continues to hold a 25.1% interest in Wanganui Gas Limited. NGC purchased the shareholding from the Wanganui District Council in 1992. Wanganui Gas distributes and retails gas in Wanganui, South Taranaki and the Rangitikei. It also retails gas (under the Direct Energy New Zealand brand) in Whangarei, Auckland, Gisborne, Hawke's Bay, Taranaki and Manawatu.
Gas Transmission Activities
12.10 NGC's transmission activities are referred to as NGCT within this report. NGCT transports natural gas from Taranaki to locations throughout the North Island, and from the northern end of the Maui pipeline at Rotowaro to the north of the North Island. NGCT's high pressure natural gas transmission network is made up of the following major sub-systems:
- North and Central: Starting at Kapuni and extending north to Rotowaro (near Huntly), through Auckland to Henderson and further north to Whangarei and Kauri (810.7km);
- Bay of Plenty: Starting at Pokuru (near Te Awamutu) and extending east to Tauranga, Taupo, Rotorua, Whakatane, Opotiki and Gisborne (608.3km);
- South: Starting at Kapuni and extending south to Wellington with a branch extending east to Palmerston North and Hastings (696.1km); and
- Frankly Road: Starting at Frankly Rd (near New Plymouth) and taking gas from the Maui pipeline to large customers in Taranaki and to the KGTP (72.3km).
12.11 NGCT's natural gas transmission network is approximately 2,200km in length and predominantly supplies gas to the petrochemical and electricity generation industries, as well as to other gas distributors and retailers. In 2003 the total number of NGCT customers was […]. Sales made by NGCT represented around […] of NGC's total sales revenue.
12.12 NGCT is also employed by MDL to operate the onshore Maui pipeline which runs between the Oaonui Production Station in Taranaki to the Huntly Power Station just north of Hamilton.
Table 12.1: NGCT Pipeline Statistics (Year Ended 30 June 2003)| System | Length (km) | Total Gas Conveyed (GJ) |
| North and Central | 810.7 | 47,617,430 |
| Bay of Plenty | 608.3 | 11,638,711 |
| South | 696.1 | 12,962,102 |
| Frankly Rd - Kapuni | 72.3 | 21,092,803 |
| Total | 2,187.4 | 93,311,046 |
Back to Top