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Work is underway to contain an oil leak in Milford Sound after a fire on a fishing boat this morning.
Fire and Emergencies were alerted to the fire in the Deep Water Basin just after 4 a.m., which has since been extinguished.
The Milford Sound Fire Department fought the blaze with Te Anau firefighters, who were dispatched by helicopter, and with the help of local fishermen.
Lyn Crosson, a spokeswoman for Fire and Emergencies, said the fire caused several gas bottles to explode aboard the ship.
The Southland Regional Council said port barriers were installed to contain small amounts of diesel, oil or other contaminants that leaked into the water after the ship partially sunk.
Its port captain, Lyndon Cleaver, said a team was working with the insurers to lift the boat out of the water.
He said there were minute amounts of oil on board and only a very small amount was visible.
The old fishing boat was being used as accommodation, but no one was injured.
Shane Nyhon and his crew had been fishing for cray and were near the boat when it caught fire. His wife Amber Nyhon said he alerted Fire and Emergency, then worked to prevent another nearby boat from catching fire by cutting the rope tied to the dock.
No one was on board the ship and there were no injuries, a Fire and Emergency spokesman said.
The fire is not being treated as suspicious.
Southland Harbor Captain Lyndon Cleaver said he was lucky the ship had a steel hull, otherwise the fire could have burned the waterline and released pollutants into the water.
They are working to make the boat waterproof as soon as possible.
The Southland Regional Council said there was no immediate evidence that diesel or other contaminants leaked into the water, although an environmental risk will remain until the boat can be made airtight.