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Contact buys more gas

Wednesday 30th July 2008

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Contact Energy, the biggest utility on the NZX 50 Index, agreed to buy an additional 32 petajoules of gas from OMV AG, one of the owners of the Pohokura gas field.

The 21-month supply contract starts March 31, 2012, when the existing deal with OMV ends, Contact said in a statement today. No price was given for the gas.

Contact operates two 400 MW combined-cycle power stations that each burn through about 20 petajoules of natural gas a year. On that basis, the additional gas would keep one of the plants running for about 18 months. Gas supplies in New Zealand are depleting because of the emptying of the Maui field.

"It's a welcome increment but doesn't solve longer-term supply issues that we face," spokesman Jonathan Hill said.

Contact stock rose 1.8% to $8.35 and is little changed this year while the NZX 50 dropped 20%.

By Jonathan Underhill

  General Finance Advertising    

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