Locals, brace for a potential gas shortage as New Zealand's natural gas production is forecasted to drop below demand, according to the latest data from the Ministry of Business, Innovation & Employment (MBIE).

For at least the next three years, the country's natural gas reserves are expected to produce 10 petajoules (PJ) less than recent demand levels, says MBIE Markets Manager Mike Hayward.

New Zealand's natural gas reserves have been steadily declining since 2019 and are expected to remain on this pathway unless there are new discoveries or innovation that enables commercially feasible production from contingent resources.

The industrial sector, which accounts for the majority of gas use, is already feeling the impact of limited gas supply, with Methanex's reported production at its Motunui plant down 31% in the March 2024 quarter compared to the same quarter last year.

The decrease in reserves is attributed to both gas extraction and revisions to reserves figures from gas field operators, who have downgraded their estimates of extractable gas.

While New Zealand holds 8.7 years of natural gas in useable reserves, the expected decrease in production is likely to impact various sectors, including households, schools, and hospitals, which rely on gas for heating and electricity generation.