Member log in

Contact extends Fonterra electricity supply at Te Rapa, will buy Genesis gas

Contact Energy [NZX: CEN], the energy retailer and generator, has secured a six-year contract with Genesis Energy [NZX: GNE] to buy its gas while extending its steam and electricity supply contract with Fonterra Cooperative Group [NZX:FCG] at its Te Rapa plant.

The power company will buy 27 petajoules of gas from Genesis over six years in a related deal to an eight-year extension of its supply contract with Fonterra, Wellington-based Contact said in a statement. The supply contract with Fonterra, the world's largest dairy exporter, extends from July next year. Contact has supplied steam and electricity for the Te Rapa cogeneration plant since 1999.

Contact declined to comment on the value of the contracts, citing commercial sensitivity.

Genesis, New Zealand's largest energy company by customer base and the last of the government's assets to be partially privatised, listed on the NZX in April. In its prospectus it said the long position on gas would reduce between 2015 and 2020. The Contact deal reduced its long position in natural gas, the energy generator and retailer said in a separate statement.

Shares in Contact gained 0.4 percent to $5.22 and have risen 1.4 this year. Genesis shares rose 0.6 percent to $1.78, up 15 percent from its $1.55 initial public offer price.

(BusinessDesk)