November 5, 2008

Vector and NZOG Sign Long-Term LPG Supply Contract

Energy network operator Vector and New Zealand Oil and Gas have signed a long-term contract for liquefied petroleum gas supply.

Under the agreement, Vector will purchase New Zealand Oil and Gas's (NZOG) ongoing daily entitlements to liquefied petroleum gas (LPG) production from the Kupe oil and gas field. The terms agreed are for the supply of approximately 15,000 tonnes per annum of LPG for a minimum of 10 years and a maximum of 15 years.

The sales agreement is conditional upon the Kupe joint venture parties reaching a satisfactory agreement upon the operational procedures for each party to take or lift its LPG entitlement from the field.

Simon Mackenzie, CEO of the Vector Group, said: "We are pleased to announce this contract. It is a valuable addition to Vector's existing LPG entitlements at Kapuni, which allows Vector to maintain a competitive position in the LPG market.

"This contract displaces LPG that would have otherwise been imported, with New Zealand-sourced gas; an important consideration at times of volatile energy prices and exchange rates and concerns around security of energy supply."