Vector: Bread and dairy shortages expected, LPG installers busy

UPDATED FRIDAY: Some supermarkets have been limiting how much bread customers can buy as shortages of bread and dairy products are expected as the Maui gas pipeline failure drags on.

Progressive Enterprises spokesperson Luke Schepen told Radio NZ that many stores have shortages of some brands of bread already.

The LPG Association says installers have been busy wiith increased numbers of smaller businesses turn to bottled LPG.

UPDATED: Fonterra says the majority of its operations in the upper North Island have been up and running since yesterday after Vector made a limited gas flow available.

The main Maui gas line is however still out of operation. The gas Fonterra is receiving is supplied through a smaller backup line.

Fonterra general manager milk supply Steve Murphy said the operation team worked hard through the night to get sites in the Waikato, Bay of Plenty and Northland back processing milk.

“However with limited gas flows available we have 3 sites at Maungaturoto, Te Rapa and Morrinsville which we have been asked to keep shut. The result is that we expect to be able to only collect and process about two thirds of the milk in the area," he said adding that farmers have been advised if they still have any milk in their vats after 5pm today they will need to dispose of it on farm.

Pipeline operator Vector is confident it can restore full gas supply to upper North Island businesses by some time over the weekend.

Work on the pipeline outage at White Cliffs north of New Plymouth is at the stage where engineers are ready to replace the damaged section.

A spokesman said this morning the job was running ahead of schedule and the job was expected to be completed within two and a half to three days.

Fast food outlets, processing factories and even crematoria are among the 2500 businesses that have been forced to shut or switch to diesel power.

In most cases involving large gas users it has been easier to stop production and ask staff to take annual leave.

Among them are factories owned by Goodman Fielder, New Zealand Sugar, Sanitarium, the Lion brewery, Affco meat works and parts of New Zealand Steel.

However, emergency supplies have been restored to essential services such as hospitals while most dairy factories are now able to process milk, which earlier had to be dumped.

The Huntly gas-fired power station has switched to coal while the Marsden Point oil refinery is using liquid fuel instead of gas.

In what is likely to keep lawyers in fees for months, the compensation battle has begun over the Maui gas pipeline outage.

Several business are reported as likely to seek compensation for having to close or reduce operations including meet processing plant Affco and fast food chain Burger King.

Just who is liable is a vexed question with the pipeline’s owner denying responsibility.

Vector chief executive Simon McKenzie told Radio New Zealand's Morning Report programme that fixing the pipe may take up to three days. He was reported last night as saying Maui was the first port of call for compensation discussions – not Vector.

Firms with business interruption insurance may be able to claim on those policies. Some offer compensation for the loss of a public utility but cover levels are usually low.

Maui Development chairman Rob Jager told the National Business Review the company would continue to offer "full support" to Vector, to repair the pipeline quickly and safely and restore gas to all customers as soon as possible.

"Maui Development is concerned about the impact of the gas shutdown on customers and understands there are issues around compensation. In the first instance, customers will need to talk to their gas retailer and review their contractual arrangements."
 
He said the company was pleased gas had now been restored to many small and medium sized customers such as cafes, restaurants and similar small businesses, and that work on the pipeline was progressing.