NZ gas franchise wrangle settled out of court

The New Zealand government, Shell and Natural Gas Corporation are to pay King Country businessman Pat Carey $NZ1.3 million in settlement of a 13-year gas franchise wrangle.

Late last week NGC said an out-of-court settlement had been reached with Carey regarding a disputed natural gas retail franchise in the late 1980s covering the greater King Country. NGC, Shell New Zealand and the Crown were to pay about $NZ1.3 million as a final no-liability settlement.

NGC spokesman Keith FitzPatrick said the dispute, had it gone to a High Court trial, would have taken at least eight weeks of complex technical and legal argument. He declined to comment further. No more details regarding the respective shares the energy companies and the Crown will each pay are available.

Carey (62) said he was relieved the whole saga was over. "The NGC statement says it all I suppose, I am under legal constraint, I cannot say any more."

Carey and his wife Diana originally planned to build a $NZ20 million liquefied natural gas plant in Te Kuiti to supply Maui gas to outlaying towns, such as Otorohanga, Ruapehu, Ohakune and Taihape via road tanker.

The private gas network never eventuated, with the Careys claiming political interference from then Energy Minister David Butcher, Petrocorp and its natural gas division.

The Careys' company Marine Resources Ltd went into receivership in1988 and the business, including Te Kuiti Energy Centre, was sold. MRL continued its interference claim, however, citing anti-competitive behaviour, which is outlawed by the Commerce Act.

Two years ago the High Court rejected attempts by Fletcher Challenge Energy (which bought State-owned Petrocorp in 1988) and NGC to stop MRL's claim and awarded costs of $NZ4000 to MRL. In September last year, the same court rejected an appeal by the Government to have an earlier court decision overturned.

Petrocorp owner FCE spun its natural gas division off as NGC last decade and Shell NZ bought the New Zealand and Bruneian assets of FCE last March.