Prime Minister Christopher Luxon has made a major liquefied natural gas (LNG) announcement at his post-Cabinet press conference on Monday.

Luxon said the country was experiencing a “renewable energy boom” but swiftly declining gas supply. There was no good reason for New Zealand to be in this position, he said.

As gas supplies dwindled, New Zealand had increased reliance on diesel and coal, he said.

In a Government factsheet, it said in order to import LNG, New Zealand needs an LNG import facility or terminal.

Following the closure of stage one of the procurement process for one of these facilities last year, Minister for Energy Simon Watts approved a shortlist of accelerated delivery solution submissions.

Speaking at post-Cabinet, Watts said the new LNG import terminal would mean fewer “winter bill shocks” for Kiwis.

He stressed that LNG would not be a replacement for renewable energy.

“LNG will not get in the way of that (renewable energy) goal,” he said.

The Government is aiming to have a contract finalised by mid-2026.

Its factsheet said it was too early at this stage to confirm the location of the facility, however the shortlisted submissions are all in the Taranaki area.

Watts said the estimated cost for the build was $1 billion. The plant would be in play by winter 2027, he said.

Asked what the cost would be to Kiwi households, the question was not answered directly, but Watts insisted the net benefit to households was $50.

Watts and the Prime Minister are not providing a figure but imply that is because it is commercially sensitive.

He stopped short of guaranteeing Kiwi power bills would be cheaper next winter but said advice from officials indicated “a downward pressure” on power prices.

Watts said the emissions profile would go down under increased importations of gas.

“This is a strategic energy security asset for New Zealand.”

Luxon said this didn’t preclude expansion in other areas like batteries and renewable projects, “but we need to get rid of the dry year risk. If we can de-risk that ... that’s the thing that puts a downward pressure on prices”.

Asked why not opt for cheaper solution like stockpiling more coal, Watts said Huntly was at full capacity for coal and New Zealand also needed more options.

Luxon has returned to Parliament after a busy few weeks addressing the aftermath of the deadly Mount Maunganui landslides and attending Waitangi.

Luxon was not at Waitangi for the day itself, but attended a Parliamentarians’ pōwhiri where he faced intense heckling during his speech.

Earlier this morning, Luxon addressed a racist social media post from US President Donald Trump.

Trump shared a video to social media portraying Michelle and Barack Obama as primates. He swiftly removed the post but not before it prompted bipartisan backlash in the States.

Luxon told TVNZ’s Breakfast he thought Trump should recognise his mistake.

Asked if an apology was in order for the post, Luxon said: “Look, yeah, I think he should.”

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.