"We need new gas supplies and that need is urgent. At present, there are only two major known gas reserves, Kupe and Pohokura, and it is Contact's view that the government and the gas industry must give much greater attention to the commercial development of these fields," he told the company's 2003 annual meeting in Christchurch today.
"Putting it bluntly, we see this as the nation's number one energy priority. Indeed, it has important implications for the whole New Zealand economy."
Pryke said there was not only the need to replace the faltering Maui field, but also the inexorable growth in demand driven by the development of the economy as a whole.
This meant the country's future gas needs would have to be met by smaller gas fields, "and not enough of them have been discovered, let alone developed to cover the shortfall left by Maui.
"There has, in our view, been too little urgency in developing known gas reserves and the lack of a truly competitive market on the gas supply side has compounded this problem," Pryke said, essentially reiterating concerns expressed in Contact's December annual report.
Pryke warned there was "no magic bullet solution", but said there were a number of areas requiring swift action.
Firstly, the energy industry needed to know exactly where it stood following last week's Maui redetermination. The necessary negotiations must be efficient and focused, and the parties needed to swiftly resolve the usage profile that would apply to remaining reserves.
Secondly, the government should strictly enforce the so-called "use it or lose it" provisions of the Crown Minerals Act, meaning those with an ownership interest in known gas reserves must be encouraged to develop them now or relinquish the resource. This applied particularly to the Pohokura and Kupe fields.
Third, there was urgent need for a regime that guaranteed open access to the gas transmission system, particularly the Maui pipeline, without which no investor would move willingly to develop non-Maui resources.
Finally, the energy industry needed to develop a "gas balancing regime" that could manage short-term fluctuations in gas availability.
Contact estimated it would need new sources of gas by 2005-06, with a national supply gap looming from as early as 2005, with "tightness" from time to time before that.
"There is no option here just to 'muddle through' as failure to act decisively on these issues not only increases the likelihood of under-investment in new energy sources and generation, but also increases the likelihood of pressure for a political solution. It would be disastrous, for example, if the problems in the gas market were to be addressed by attempts at further reform in the electricity market, he added.
Contact - this country's largest energy retailer with over 565,000 electricity and gas customers - today declared a $NZ117 million adjusted net surplus for 2002, which Pryke described as "a strong result".
It yesterday reported an $18.4 million net surplus for the three months ended December 31, which was slightly lower on an adjusted basis than the $20.3 million for the same period last year.
