Echoing what industry commentators have been saying to EnergyReview.net, Hodgson told the Gas Association of New Zealand on Monday night that the Independent Expert's report on remaining Maui reserves had compounded an already tight gas market.

"For some it was expected that production from new gas fields would be required for electricity generation by around 2006. With the Maui redetermination, this timeframe has come forward a year.

"The result of the Maui redetermination has made this work more urgent. The independent expert's finding suggests the field now has around 350 PJ of gas remaining that can be economically recovered at the Maui contract price. This is significantly less than previous expectations.

"The low estimate has increased the demand for gas from other fields. It has further highlighted the need for open access to the Maui pipeline, and for exploration and new gas field development. The tightness of gas supply means that all industries relying on gas need to adjust to a new supply environment. Gas is critical for the security of our electricity supply," Hodgson said.

However, he was hopeful the Pohokura gas-condensate field would be developed in a timely manner. "It is not clear how much Pohokura gas will be used for electricity generation, but a clear indication of where the gas will be used will allow key investment decisions to be made."

Because of New Zealand's internationally competitive and attractive petroleum exploration regime, Hodgson was confident of more discoveries and developments of further gas fields.

He said a recent IHS Energy survey showed New Zealand had moved from 36th place in 1999 to the 14th most attractive country in the world for petroleum exploration investment.

"I think the improvement shows we are making the right decisions and can look forward to continued interest and investment in New Zealand."