The revival of distributed gas production
4 December 2025
Natural gas has been coming from Taranaki since the 1970s, but before this, gas – often known as ‘town' or ‘coal' gas – was produced locally at 50 different locations all over the country.
Gas was historically manufactured locally in New Zealand from 1863 right through to 1984 in some places, according to Grant Bourke from the NZ Institution of Gas Engineers.
There were gasworks “even in small towns” such as Temuka and Waipawa, he said.
“If you were any town with an aspiration for being on the map, you had a gasworks.
“Manufacturing gas in local places was a thing – and it was a thing for a long time.”
He says that when you look at the historic maps of where New Zealand produced gas, and look foward to where renewable gas might be produced in the future, “to me it looks like we’re going back to what we had a hundred years ago”.
It could look very much like the distributed network of local gasworks in the past, he said.
Historically, gas was manufactured by heating coal without air, producing carbon monoxide and hydrogen.
Gas manufacturing often produced byproducts of tar and coke, and selling these was a valuable part of the financial model, Bourke said.
Just like today with the production of renewable gas from organic waste, the valuable byproducts could make a real difference to the economic viability of the business. “Sometimes gas will be the byproduct.”
Bourke said coal gas was about half the energy value of natural gas today, and piped at very low pressures.
When natural gas came on stream in the North Island, it often had to be diluted with air to be compatible with the appliances designed for the lower intensity ‘town gas’. Similarly today, in the production of ‘synthetic natural gas’ from LPG, air is blended to lower the calorific value, Bourke said.
Blending one gas type with another has been done historically and is nothing new, he said.
“That’s something we’re going to be looking at again in the not-too-distant future.”
As New Zealand potentially moves to multiple sources of gas, blending natural gas with synthetic natural gas, renewable biomethane or renewable hydrogen won’t be a problem, he said.
And neither will there be any significant requirement to upgrade the distribution system this time around.
“When we changed from town gas to natural gas our distribution networks were a shambles,” he said.
“They were over a hundred years old and gas losses were horrendously high.
“Today, when we think about changing to different types of gas, our distribution system is excellent.
“In summary, to go from where we are now to a renewable future is a heck of a lot easier than what we had to do back in the 70s when we moved from town gas to natural gas.”
He envisages multiple renewable gas enterprises with flexible gas treatment plants throughout the country.
These could be based on LPG diluted with air as a base fuel, lowering the energy intensity so that a variety of other compatible gases could be blended without affecting appliance performance or the need for appliance recalibration.
Blends could include biomethane produced from local dairy farm effluent treatment, sewerage treatment plants and green waste. Hydrogen produced from solar PV plants via local electrolysers could also be blended where and when available.
“We’re moving into an environment where flexibility is going to be key,” Bouke said.