Vector Says Maui Gas Pipeline Won't Be Fixed For At Least Two Days

The Maui gas pipeline, operated by infrastructure and gas distributor Vector Ltd. (VCT.NZ), won't be fixed for at least another two days after a gas leak was confirmed late Monday, Vector Chief Executive Simon McKenzie said Wednesday.

The pipeline on New Zealand's North Island was closed Tuesday and excavations are currently underway in order to repair the pipeline, McKenzie told a media briefing. He said work was proceeding with extreme caution in order to avoid compounding the problem.

Regarding the expected repair time, McKenzie said "at this point in time I believe it will probably be greater than two days." He said he would provide an update later Wednesday.

All commercial and industrial gas users in the Bay of Plenty and Waikato regions and northwards have been told to stop using gas until further notice, and several milk-processing plants are reportedly having to dump millions of liters of milk.

Officials from dairy giant Fonterra Co-Operative Group Ltd. weren't immediately available for comment but The New Zealand Herald reported Wednesday that the gas leak meant farmers were throwing away NZ$20 million of milk a day. McKenzie said every effort would be made to restore gas to hospitals and dairy companies Wednesday.

The Maui gas pipeline is owned by Maui Development Ltd., a joint venture among several oil and gas companies operating in New Zealand, including OMV New Zealand Ltd., a unit of Austria's OMV AG (OMV.VI), and Todd Energy. McKenzie noted that it is the first problem the pipeline has had in 30 years.

-By Rebecca Howard, Dow Jones Newswires; [phone]; [e-mail]