4 Dec 2009

More gas for Auckland - but can it get through?

6:29 pm on 4 December 2009

The gas industry is scrambling to free up a constricted supply of natural gas into Auckland.

The issue has been brought into sharp focus by the arrival of a new player on the Auckland gas scene, Greymouth Petroleum, which has just announced a big discovery of natural gas in Taranaki.

Greymouth Petroleum has since run up against constrained capacity in the gas pipeline leading from Waikato into Auckland, which could hamper its ability to sell its gas to the Auckland public.

The pipe is too narrow to transmit all the gas into Auckland that suppliers would like at peak times.

Greymouth hopes to be able to negotiate its way through this problem, but other players want a permanent solution.

Industry stakeholders were called to a meeting in Wellington recently to try to resolve the matter. The meeting was initiated by pipeline owner Vector, whose chief executive, Simon Mackenzie, says capacity can be enlarged if there are proper commercial arrangements in place.

He says capacity is only exceeded about 3% of the time, and a new pipe is possible if needed.

The Refining Company, in Northland, says one solution might be more investment in increasing the compression of gas.

Proven reserves in north Taranaki field

Greymouth Petroleum says testing has confirmed that its Kowhai field in north Taranaki has proven and probable reserves of 134 petajoules of gas and 3.2 million barrels of condensate oil.

Chief operating officer John Sturgess says the discovery of these onshore gas reserves increases the potential for further sizeable gas finds in the near future and makes it less likely that New Zealand will need to import highly priced gas.

Gas from the field is being sold to firms such as Ballance Agri-Nutrients, but Greymouth also has a small gas-fired power plant in Papakura, which could supply about 4000 homes.

Greymouth bought the field from US-based Swift Energy last year.

New Zealand used around 160 petajoules of natural gas last year, more than half of it in electricity generation.