Latest / Best of Business / Christopher Luxon: Prime Minister comments on progress of proposed LNG terminal in Tauranga

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Christopher Luxon: Prime Minister comments on progress of proposed LNG terminal in Tauranga · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
• 0:12
  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: It is Monday morning. The Prime Minister Christo ba Lacson
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  Speaker 2: is with us. A very good morning to you.
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  Speaker 3: Good morning to you, Mike.
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  Speaker 2: I've got a couple of questions for you that you
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  Speaker 2: will not hear on radio anywhere else in this country today.
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  Speaker 2: Unique questions. Unique questions. I'll come to them in just
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  Speaker 2: a couple of moments, but just let me get a
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  Speaker 2: couple of new things out of the way too, just
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  Speaker 2: to tick that box so someone doesn't yell at me
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  Speaker 2: and so it didn't cover enough subject. The LNG thing.
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  Speaker 2: Is that real story this morning? Yep?
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  Speaker 3: I mean basically for me, it's coming down to the
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  Speaker 3: commercial business case. LNG as a commodity will be elevated
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  Speaker 3: for a bit. This is about procurement kit to sort
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  Speaker 3: of create the flexibility for us as a backup.
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  Speaker 2: Solution so you're not canceling it.
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  Speaker 3: Well, the answer to me is, I'm just briefally going
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  Speaker 3: to make a decision on the commercial case. If it
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  Speaker 3: doesn't stack up, we won't.
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  Speaker 2: Be doing it.
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  Speaker 3: When you're making that decision, well, when the procurement process finishes,
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  Speaker 3: which is middle of the year, so that's about it.
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  Speaker 3: But when there's a number of bits in there, they've
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  Speaker 3: got a whole bunch of ideas. Some will be light touch,
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  Speaker 3: some will be golden engineered, and essentially they've got to
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  Speaker 3: make it stack up and we'll make it call.
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  Speaker 2: Okay, as you sit here this morning, it seems to me,
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  Speaker 2: why would you look at something like that. Surely you
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  Speaker 2: would know when making a decision like this that gas
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  Speaker 2: goes up and down depending on what's happening in the wall.
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  Speaker 1: It does.
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  Speaker 3: I mean, I remember running an airline on thirty five
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  Speaker 3: dollars and one hundred and forty dollars a hour over oil,
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  Speaker 3: So you do need to look through that because there's
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  Speaker 3: a different The purchase of LNG is one thing, but
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  Speaker 3: obviously we've got to make sure we get into this
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  Speaker 3: thing right size and it's fit for purpose. So I
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  Speaker 3: genuinely just want to make sure it's the cost benefits
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  Speaker 3: there the business case is right. If it's a good
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  Speaker 3: business case, yep, we'll do it. If not, we won't.
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  Speaker 2: Okay, when's that timeline?
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  Speaker 3: I think from a memory when we kicked it off,
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  Speaker 3: I think it's due middle of June or into June,
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  Speaker 3: somewhere on there. I've got a number of bidders that
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  Speaker 3: have come to us with their ideas of how to
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  Speaker 3: go about doing it. They'll imagine there'll be lots of
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  Speaker 3: different engineering solutions for that of varying costs. They've got
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  Speaker 3: to put their best foot forward. I want them to
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  Speaker 3: put their best foot forward and give it really a
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  Speaker 3: good go as an option, and then we'll have.
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  Speaker 2: A look at it. Okay, Australia, they're going to under
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  Speaker 2: some purchases of fuel. Do we need to do that potentially?
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  Speaker 3: Yeah? So what that's about us saying, Look, you talk
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  Speaker 3: to your fuel importing companies. They have all these forward orders.
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  Speaker 3: At the moment, all our forward orders are coming in.
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  Speaker 3: We've got healthy stocks. We'll update our numbers later on
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  Speaker 3: this afternoon, but I suspect that it will be in
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  Speaker 3: good shape. And then what you must expect because you know, no, no,
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  Speaker 3: I don't know, but I just know that there's been
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  Speaker 3: no challenges over the last week or so so ships
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  Speaker 3: have been arriving and that'll be adding into our stocks.
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  Speaker 3: But the second thing I'd say is that you then
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  Speaker 3: want to make sure that if there's any incremental additional
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  Speaker 3: capacity we can get, we'd like to try and get
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  Speaker 3: that now rather than later. And that's like unsolicited bids
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  Speaker 3: over and above fuel that we're already getting from the
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  Speaker 3: fuel orders that are coming out of the importing companies.
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  Speaker 3: So this has us being quite opportunistic, and certainly that's
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  Speaker 3: a conversation that we're up for as well, and we
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  Speaker 3: are thinking about that. But again, how you structure those
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  Speaker 3: deals so New Zealand doesn't get screwed and all of
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  Speaker 3: that is kind of important.
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  Speaker 2: Okay, last week when we were talking about this, you're
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  Speaker 2: going to ring Lawrence Wong and you have I don't
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  Speaker 2: know that you were asked specifically about it, but did
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  Speaker 2: your phone calls with the Koreans, the Malaysians or Singapore
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  Speaker 2: elicit something tangible that would serve us well beyond what
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  Speaker 2: we've got currently as regards petrol.
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  Speaker 3: What I'm trying to do in those calls is put
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  Speaker 3: in New Zealand top of mind. You know, they are getting
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  Speaker 3: hit with lots of calls I imagine from people who
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  Speaker 3: are getting very anxious, and I'm reminding them of our
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  Speaker 3: comprehensive strategic partnership upgrades that we've done so we've got
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  Speaker 3: highest levels of partnership that we can have. In the
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  Speaker 3: case of Singapore, we're very much committed to and even
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  Speaker 3: though will sign it in May, we're already operating under it,
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  Speaker 3: which is our essential supplies piece. So I think they
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  Speaker 3: were very positive conversations. Again, if your prime ministers and
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  Speaker 3: presidents of those countries that have refineries in those countries
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  Speaker 3: that they don't. Some are privately owned, some are publicly owned,
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  Speaker 3: some are a combination. It's really about those refineries out
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  Speaker 3: there in the world hustling to find alternative sources of
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  Speaker 3: crude oil to bring to their refineries, and some of
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  Speaker 3: them start looking to Canada, they start looking to Chile, Peru,
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  Speaker 3: other countries around the world, and it's you know, they're
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  Speaker 3: very good at that. They're big oil companies. They know
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  Speaker 3: where big sources of oil could be still in the system.
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  Speaker 3: But you know, you've seen other countries have It's also
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  Speaker 3: been interesting because you talk to these countries and they
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  Speaker 3: all have slightly different starting points from where we are.
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  Speaker 3: We are relatively well organized. You know, we've got a
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  Speaker 3: great ministerial group all over it like a rash meeting,
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  Speaker 3: you know, once or three times a day, We've got
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  Speaker 3: good supplies, much high levels of stock, say, than the
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  Speaker 3: Australians have and others have. You go to places like Malaysia, Slovenia.
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  Speaker 3: I was talking to the European president. They've all got
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  Speaker 3: different systems where they've been underwriting fuel and therefore they're
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  Speaker 3: now massively exposed. They've all got sets of dramas. So
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  Speaker 3: you know where in our job is one secure fuel supply. Yes,
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  Speaker 3: it's going to be expensive, but secur it so that's
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  Speaker 3: what kills jobs. Two, if you have to get down
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  Speaker 3: a road where you've got to make choices about who
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  Speaker 3: gets that fuel, put that framework in place. That was
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  Speaker 3: what Friday was about. And three make sure you can
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  Speaker 3: support keywis, but learn the lessons from COVID and do
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  Speaker 3: not repeat them.
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  Speaker 2: You will know more about this than I do. But
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  Speaker 2: what I've been unable to work out in my mind,
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  Speaker 2: there's still eighty percent of the world out there. Oil
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  Speaker 2: out there, So twenty percent eighty percent still out there.
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  Speaker 2: The Saudi Arabian pipeline is up to nine million barrels
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  Speaker 2: a day. Can we realistically hustle our way through this?
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  Speaker 2: In other words, the world is not lacking oil, yes,
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  Speaker 2: we'll pay more for it, but the supply is there.
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  Speaker 3: Yeah, you're right, So I think that's the issue that
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  Speaker 3: I'm thinking about in three months time, frankly, is.
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  Speaker 2: That the oil is there.
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  Speaker 3: The question is a logistical supply chain one, which is,
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  Speaker 3: when hostilities cease, you're going to be producing oil. Then
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  Speaker 3: you've actually got to store it.
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  Speaker 2: There's a whole.
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  Speaker 3: Bunch of storage that's already taking place as storage tanks
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  Speaker 3: are maxed out in the region. Then you've got to
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  Speaker 3: get it from storagely into ships. Then you've got a
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  Speaker 3: last account. I hod there was three thy six hundred
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  Speaker 3: ships stuck in the Homus. Typically you do one hundred
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  Speaker 3: and twenty five passages through the Homu straight a day.
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  Speaker 3: Currently there's three ships moving a day of dodgy from
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  Speaker 3: dodgy places. So there's just a I'm just saying, you know,
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  Speaker 3: it's sort of like an elephant like, how you digest
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  Speaker 3: that that change in the supply chain and how it
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  Speaker 3: works its way through. That's what I'm thinking is what
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  Speaker 3: will cause ultimately our disruption to supply, which we want
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  Speaker 3: to have our head in the game ready to deal with.
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  Speaker 2: Do you worry? There were forecasts a couple of forecasts
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  Speaker 2: from the banks last week. Q two is now going backwards,
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  Speaker 2: Housing is flat for the year. Do you worry this
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  Speaker 2: will reflect on you in election year or do you
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  Speaker 2: believe that people will see see it for what it
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  Speaker 2: is and it's not your fault.
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  Speaker 3: Look, I mean, I get it might come in. I
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  Speaker 3: think we're all fatigued and tired and we're over it, right.
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  Speaker 3: I mean, we went through COVID recession, inflation, you know,
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  Speaker 3: Tariff's weather events. Now are dealing with this issue. I honestly,
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  Speaker 3: I just can't. I just don't give that any thought.
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  Speaker 3: What I'm focused on is making sure I'm doing the
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  Speaker 3: very best I can to help get Kiwis through what's
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  Speaker 3: another crisis and another challenge. I do want to minimize
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  Speaker 3: the impact on inflation. I do want to minimize the
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  Speaker 3: impact on growth. I acknowledge there will be a hit
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  Speaker 3: to both, but I'm not being naive about that. But
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  Speaker 3: we are in better shape dealing with it now than
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  Speaker 3: we were three months ago when we had anthy of
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  Speaker 3: our financials a week before the conflict. We're better than
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  Speaker 3: we were two years ago dealing with seven point three
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  Speaker 3: percent inflation. But I've got to manage do well I've
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  Speaker 3: got to manage the CHRISTI as well, right, that's essential
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  Speaker 3: and his znes it's me to do.
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  Speaker 1: So.
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  Speaker 2: I get a letter this morning morning, Mike. I know
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  Speaker 2: you via a client that I attend to in the morning.
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  Speaker 2: I enter her home and hear her voice coming from
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  Speaker 2: her bedroom. You are one of her constant companions. I'm
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  Speaker 2: worried her in her home support she's a home support worker,
• 7:35
  Speaker 2: may not be able to attend to her needs and
• 7:38
  Speaker 2: she will have to lay listening to you waiting for
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  Speaker 2: help to come. Now, not playing the violin on that.
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  Speaker 2: What I'm saying is that of all the people who
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  Speaker 2: had their handout asking for money at the moment, that
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  Speaker 2: would strike me as one of the better cases.
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  Speaker 3: So there are groups of people that we are thinking
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  Speaker 3: about how best to deliver support to.
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  Speaker 2: When we deliver that support.
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  Speaker 3: Again, we've got to do it timely, targeted, and temporary.
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  Speaker 3: That's a big learning out of COVID. We've got to
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  Speaker 3: keep an eye on making sure we're not minimizing the
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  Speaker 3: impacts on inflation and growth. That's a big learning out
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  Speaker 3: of COVID. And we've actually got to get it to
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  Speaker 3: the people who genuinely going to need it. Because I've
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  Speaker 3: set up front. You know, I'm sadly given the state
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  Speaker 3: of our finances, we're not going to be able to
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  Speaker 3: alleviate the pressure off everybody. This is not COVID two
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  Speaker 3: point zero. People are not going to be sitting at
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  Speaker 3: home baking sour dough. The kids are going to school,
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  Speaker 3: you know. That's why it's business as usual at the moment.
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  Speaker 2: So she has a case. Yeah, I think, I think.
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  Speaker 3: I think there's a number of cases of people that
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  Speaker 3: we have already started to talk about how can we
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  Speaker 3: get support to them. And but again we've got it
• 8:33
  Speaker 3: when we developed the detail of a package. It has
• 8:36
  Speaker 3: to be sensible. You know, we cannot do the cash
• 8:38
  Speaker 3: berzuoka that we saw through COVID period that caused plain
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  Speaker 3: and suffering down the road.
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  Speaker 2: So I was in christ jur on Friday.
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  Speaker 3: I heard first time you left your home or your
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  Speaker 3: studio since what nineteen ninety six.
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  Speaker 2: As indeed were you. It is hard correct me if
• 8:53
  Speaker 2: I'm wrong. It is hard to overstate the value of
• 8:58
  Speaker 2: the stadium to people in christ jug Yeah.
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  Speaker 3: Look, I think Christich, there's a lot going on in
• 9:04
  Speaker 3: christsch It's of interest to me with respect to the
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  Speaker 3: whole of New Zealand. You've got a city that's built
• 9:08
  Speaker 3: with modern, new, reliable infrastructure. You've got consistent, moderate slow
• 9:12
  Speaker 3: house growth that's going faster than people's wages. It's affordable.
• 9:16
  Speaker 3: You've got great institutions down there, rebuilt university. You've got
• 9:19
  Speaker 3: an engineering school that's spinning off innovations like doorn Aerospace.
• 9:22
  Speaker 3: We've got a launch pad down there for rockets. You've
• 9:25
  Speaker 3: got a brand new stadium there. That stadium, for every
• 9:28
  Speaker 3: dollar we spent trying to bring attractions there, whether it's
• 9:30
  Speaker 3: you know, Robbie Williams or six sixty or whatever it is,
• 9:33
  Speaker 3: drive three dollars twenty back into local bars, hotels, hospitality sector.
• 9:38
  Speaker 3: So it is truly a world class venue. It's amazing,
• 9:41
  Speaker 3: Like the seats are right on the edge, you'll be
• 9:43
  Speaker 3: able to hear the line out calls. And I'm just
• 9:45
  Speaker 3: proud as a christ hitch Lad I know, you know,
• 9:48
  Speaker 3: it's actually the resilience of that city is what that was,
• 9:51
  Speaker 3: was what that stadium represents.
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  Speaker 2: Couldn't agree more so. I'm sitting on the plane I
• 9:57
  Speaker 2: rushed to the airport to come back. Yeah, and if
• 10:01
  Speaker 2: things take longer, that screening process at the airport's a
• 10:03
  Speaker 2: bit slow. So anyway, I'm rushing back. I'm busting people
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  Speaker 2: talking to you point, there were some people talking to
• 10:10
  Speaker 2: there was more importantly, I was busting to go to
• 10:14
  Speaker 2: the toilet. So I look through the screening and I
• 10:17
  Speaker 2: see the gate gate nineteen. It's boarding. I think I
• 10:19
  Speaker 2: better get on board. So I get on board. It's
• 10:21
  Speaker 2: ten to three. This is the three o'clock. It's ten
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  Speaker 2: to three. Sitting on board, I think I can last
• 10:25
  Speaker 2: an hour and a half. I'll be okay. Got a
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  Speaker 2: strong ladder. Yeah, So I'm on the toilet supplements. I'm
• 10:29
  Speaker 2: thinking we're going to take exactly. If we're going to
• 10:31
  Speaker 2: take off on time, it's going to be fantastic. This
• 10:33
  Speaker 2: is the story of in New Zealand. It's going to
• 10:34
  Speaker 2: take off on time. Didn't they say we're waiting for
• 10:36
  Speaker 2: some cargo.
• 10:38
  Speaker 3: Were you.
• 10:40
  Speaker 2: Were you? Were you that cargo? No? Were you on
• 10:43
  Speaker 2: the three o'clock? I think I was on the four,
• 10:46
  Speaker 2: isn't I were you when you drove through Auckland? Were
• 10:49
  Speaker 2: you and your eyes seven driving back to Auckland about
• 10:51
  Speaker 2: five o'clock at night?
• 10:53
  Speaker 1: Yeah?
• 10:53
  Speaker 2: I think you were on the three o'clock. The three.
• 10:55
  Speaker 2: You were on the three o'clock.
• 10:56
  Speaker 3: I was on time and full of my friend you.
• 10:58
  Speaker 2: You held me in.
• 11:00
  Speaker 3: I'm not having your start that at all. That is
• 11:02
  Speaker 3: completely unfair. That's just media media. They hold the plane misinformation.
• 11:07
  Speaker 3: How long would they hold the plane, mate, They hold
• 11:09
  Speaker 3: the play are the rulers. And when I was in
• 11:11
  Speaker 3: New Zealand it was the same. You do not hold
• 11:12
  Speaker 3: the plane for me, my family, nobody. That plane goes
• 11:15
  Speaker 3: on time and full. You've only got three jobs running
• 11:17
  Speaker 3: on your line to fi gravity, get people from A
• 11:20
  Speaker 3: to B safely as always. Job number one, two, preferably
• 11:23
  Speaker 3: with their bags, would be nice, and three on time okay,
• 11:25
  Speaker 3: and if we can make money at the end of it,
• 11:27
  Speaker 3: they would be nice.
• 11:27
  Speaker 2: There we go. Nice to see you, Prime Minister.
• 11:30
  Speaker 1: For more from News Talk st B, listen live on
• 11:33
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• 11:36
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