A significant decline in gas production has raised concerns about energy security, according to figures released by the Gas Industry Co.

The data shows a 12.5% reduction in gas production in 2023 and a 27.8% reduction in the first quarter of 2024, exceeding projections.

Energy Minister Simeon Brown and Resources Minister Shane Jones have been advised that large gas consumers are struggling to secure contracts due to the supply constraints.

Brown attributed the decline to the previous government's policies, which "stifled investment confidence in the natural gas sector."

He warned that reduced gas supply would force industrial users to reduce production, leading to increased coal use and higher prices for consumers.

The All-of-Government contract for reticulated natural gas, which expires in September, is currently being renegotiated, and low production could result in higher prices and shorter-term contracts for critical services like schools and hospitals.

Jones described the situation as a "hangover" from the previous government's policies, which the current government aims to reverse.

The Government is working with the sector to increase production, and Jones plans to introduce changes to the Crown Minerals Act to "revitalise the sector and increase production."

In response, the Ministry of Business, Innovation and Employment has established a Gas Security Response Group to coordinate gas producers, major gas users, and government agencies during this period of tight supply.