Energy supply issues echo those of 25 years ago

Energy sector ‘lifer’ Tony Bissell reflects on more than 25 years with New Zealand’s gas sector

4 November 2025

With energy sector reform and energy shortages hot topics in New Zealand once again, former GasNZ board member Tony Bissell feels he has almost come full circle.

Formerly general manager commercial with Todd Energy, Bissell is now working as an independent consultant to the energy sector, built on a career in the industry in the UK, Africa, Australia and New Zealand.

Twenty-seven years ago, just as New Zealand’s 1998 energy sector reforms were kicking off, Bissell was recruited as a consultant by Ernst & Young (EY) in New Zealand based on his experience of similar reforms in the UK.

His energy sector expertise was drawn on by EY for projects in Australia and Africa as well as New Zealand before Tony sought a job that let him more properly settle down in New Zealand – commercial manager at Huntly Power Station.

That was in the early 2000s, when after a couple of dry years, security of energy supply was as much of a concern as it has been in recent years.

In a forerunner to the current day, the Government, as then full owner of Genesis Energy, was keen that Genesis build up its stockpile of coal to boost energy security.

Having bought as much New Zealand’s Waikato-sourced coal as possible from Solid Energy and other smaller local suppliers, Genesis had to look to import a similar type of coal internationally – finding a suitable look-alike in Indonesia – somewhat oddly marketed at the time as ‘Enviro-coal’.

It fell to Bissell to negotiate the contract and sort out the infrastructural logistics of importing the coal.

Like today, Huntly’s coal stockpile provided a crucial flexing option for Genesis.

Natural gas supply – dominated by the massive Maui and Kapuni fields – was available but was largely tied up in long-term contacts with other market participants, Bissell adds.

Pre-2000, due to the size of these fields, and the apparent over-supply of gas to meet New Zealand’s energy needs, there was little incentive for new exploration and development, he says.

But then, almost a harbinger of recent events, the size of the Maui reserves was reassessed significantly downward. Suddenly the situation changed and it was like “Blimey, there’s nowhere near as much gas in this field as we thought there was, and how are we going to cope if we have more dry years?”', he says.

The near-to-medium-term gas supply and demand outlook had suddenly significantly tightened, and the market was consequently reinvigorated.

There was an influx of local and international oil and gas companies, and together with already-established companies such as Shell and Todd, new fields such as Pohokura, Kupe, Kowhai and Turangi were developed and successfully put into production.

The Texas-based oil and gas company Swift Energy was one of the new entrants to New Zealand, making discoveries at Rimu and Kauri along with expanding its New Zealand business with the acquisition of the Tariki, Ahuroa, Waihapa and Ngaere (TAWN) fields.

Swift recruited Bissell in 2004 to manage the company’s commercial transactions as its New Zealand business continued to grow. He worked there until moving across to new owner Origin Energy when Swift Energy decided to re-consolidate its business back to the States in 2008.

At Origin, Bissell was the joint venture manager for the Kupe field and was involved in developing the commercial arrangements for the Ahuroa gas storage facility, which now stores between six to eight PJs of ‘working gas’.

Contact Energy and Todd Energy both have contracts with the storage facility, currently owned and operated by Flexgas, a Clarus subsidiary.

Ahuroa is one of the current ‘flex’ tools available to help manage security of energy supply, affording both Contact and Todd “good flexing portfolios”, Bissell says.

Another essential flex arrangement has been provided over the years by Methanex, he says.

Whenever gas production exceeded New Zealand’s energy needs, Methanex made the market economically efficient.

“You could produce most of your gas and sell it into the marketplace and then Methanex would likely sponge up whatever was left, so you would keep getting good return on your investments.

“You didn't need to constrain your production, but you probably wouldn't get a great price from Methanex compared with what you'd get in the energy marketplace.

“More recently though, the Methanex flex has been operating in the opposite direction with the company on-selling some of its contracted gas to gentailers to alleviate dry year security of supply concerns. ”

While the issue of security of supply has resurfaced, just as it was in the early 2000s, the market has changed significantly, and so has the geopolitical side of things over the twenty-five years, Bissell says.

The gas market has contracted significantly, driven by major write-downs in reserves for aging fields but, unlike the early 2000s when the scarcity of gas reinvigorated investment in the sector, regulatory changes and ongoing uncertainty have stymied such activity this time.

“Instead, they're again saying to Genesis, go and buy some more coal. Get some more overseas coal in.

“I know the government is also thinking about [importing] LNG. My own personal view is that's a sledgehammer solution, at least in the near-term.

“I struggle to see how it would be economically prudent at present when there's a load of other tools in the box that could be used which would be more readily available and at lower cost.

“In addition to the overseas coal option, the Government could use its $200 million fund to underwrite additional development wells in existing fields, and participants could manage flexibility with other contracted commercial arrangements.

“You could call on various other options in the flex portfolio rather than spend an incredible amount of money in setting up an LNG infrastructure,” Bissell says.

However, he believes that the existing flex options might only ‘kick the fuel security can down the road’ for a few years so understands why the Government is considering LNG now.

Bissell says it will inevitably be very expensive “but an insurance policy always is, and if it can provide long-term security across the gas and electricity sectors, then the Government may determine that the benefits outweigh the cost”.

With most analysts believing that Maui will be closed and Methanex will exit New Zealand in the next few years, supply and demand will probably move somewhat in sync, he says.

“There may be an oversupply [of gas] for a while as a result of that, because the Pohokura gas that was going to Methanex suddenly needs to find a new home.”

This would create another source of near-term supply–demand balance uncertainty and further disincentivise investment in existing fields.

In the meantime, speaking as a seasoned commercial deal maker, Bissell says it makes sense that commercial deals are currently being done “to try and prevent security of supply shocks going forward”.

With specialist commercial energy experience built up over the years, Bissell decided the time was ripe to hang up his shingle as an independent consultant to the sector, helping to forge commercial solutions to the ever-present challenge of balancing supply and demand.

With varying demand, diminishing supply of natural gas, and a very dynamic commercial market, Bissell believes opportunities to develop and agree contractual flexing arrangements between parties in the sector provide some of the most immediately available tools to ensure New Zealand’s energy security over the next few years.