Major Gas Users Group spokesperson Len Houwers. Photo: RNZ / Robin Martin
Big industrial gas users will meet with Resources Minister Shane Jones in Auckland on Friday to discuss the problems with securing an affordable supply.
Fertiliser manufacturer Ballance Agri-Nutrients, which uses gas to produce urea, has revealed it might have to temporarily close its Taranaki plant as it struggles to find a supplier of the rapidly shrinking and expensive resource.
Major Gas Users Group spokesperson Len Houwers said Ballance was not the only company having such problems, and he would be meeting with Jones and other businesses to talk about how the gas market was operating.
Houwers believed electricity giants were partly responsible for industrial customers not being able to secure affordable gas - the generators could afford to pay more for the increasingly scarce resource, he said, with Contact Energy recently outbidding Ballance for a seven-year contract.
Meanwhile, there were medium-to-large companies that were at their financial limits, he said.
"We have gas, so the problem we've got is lack of sufficient supply to meet all demand, so naturally they would expect prices to be raised and for Balance particularly," Houwers told Morning Report.
"The price they're being asked to renew their contract is just simply not affordable relative to their options of importing it."
However, Contact Energy is defending snapping up the fertiliser manufacturer's gas supply, saying the rapidly declining resource meant hard choices had to be made.
The power company said its outbidding of Ballance was for the good of country, and winning the supply meant it would be able to support hundreds more businesses and ensure energy security.
Houwers said the question of being more reliant on the importing of fertilizer depended on what we valued in terms of economic security.
"We've given up a lot of domestic production in favour of importing it," he told Morning Report. "If you think about the refinery, for example, is a potential example of that.
"As industries close down here, we become much more reliant on importing and supply chains from overseas. Fertilizer is just one aspect of that."
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