Maui Gasfield Redetermination To Proceed

20 June 2002

FOR IMMEDIATE RELEASE

Agreement Allows Maui Gasfield Redetermination To Proceed

Contact Energy Ltd today welcomed developments that should allow the timely redetermination of entitlements to Maui gas.

All parties to the Maui contracts – the Maui joint venturers Shell and Todd, the Crown, Methanex, Natural Gas Corporation, and Contact Energy - have agreed to arrangements that will allow redetermination to proceed.

As a consequence, Methanex has agreed to withdraw its legal action challenging the adequacy of information provided for the redetermination and cleared the way for the appointment of an Independent Expert to assess the remaining reserves in the Maui field.

“We are particularly pleased that Methanex has chosen to withdraw its action, which had the potential to delay significantly the redetermination process,” said Contact’s chief executive, Mr Steve Barrett.

“Maui is New Zealand’s single most important source of natural gas for electricity generation. If existing rates of extraction were maintained, it is likely that Maui would be exhausted by around 2006.

“It is important that the parties to the Maui contracts know as quickly as possible where they stand with respect to remaining Maui reserves,” said Mr Barrett. “This will provide a firm platform for planning for new sources of gas supply and for managing the efficient use of the remaining reserves.”

The Maui Contract allows for the appointment of an Independent Expert in the event that parties to the Contract cannot agree as to the remaining volume of gas reserves.

Methanex initiated court action last month against the Crown and Maui Mining Companies to challenge the adequacy of information provided on the remaining reserves. Contact Energy and NGC joined the Crown and MMC’s as parties to the action, opposing the Methanex application.

“Today’s agreement sets a timetable for the appointment of the Independent Expert, and Contact envisages a result from this process before the end of the year,” said Mr Barrett. “In the meantime, it remains possible for the parties to the Maui Contracts to agree amongst themselves on a formula for redetermination, and Contact will continue to pursue that option.”

ENDS

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