New Zealand gas field estimates take a tumble

Jan 31, 2003 01:00 AM

The great gas hope, Pohokura, might have about 45 % less gas than first estimated. Todd Energy managing director Richard Tweedie said that 500 to 600 PetaJoules was a figure he was comfortable with as an estimate of reserves.
That is about 45 % less than the initial estimate of 964 bn cf of gas, about 1000 PetaJoules. The energy industry is pinning its hopes on this field to partially replace the giant Maui field, which is running down earlier than expected.
Mr Tweedie said the owners, Shell NZ (48 %), Todd (16 %), and Preussag Energie (36 %) were still getting "a fix" on the reserves at Pohokura. They were unlikely to finally commit to development till "later this year" when they had a clearer picture of reserves. They would want to have secured a gas contract through a tender to underwrite the development before making a final commitment.

The state-owned Genesis Power raised concerns about the Pohokura supply and said it was putting its development of the $ 400 mm, 360 MW gas-fired power station at Huntly on hold because of the uncertainty of gas supply from Pohokura. The new Huntly station is considered critical to avoid power shortages forecast in the event of a dry year in the next five years.
"It's widely reported that the reserve position is a bit variable, which is not abnormal in this type of situation," Mr Tweedie said. At this stage in a field's life there was a considerable range between a proven reserve position, called a p90, and an optimistic "possible" case, called a p10. Developers tended to work around p50 which was an estimate with a 50 % chance of being right or wrong.
"That number is... 500 to 600 PetaJoules level. That is p50," Mr Tweedie said. "You tend, if you've got it right, to gravitate to the p50 number. I personally feel pretty comfortable with the p50 number at this stage."

Mr Tweedie said the partners had drilled two appraisal wells in the Pohokura field. A production test had been done on a northern well and they would be carrying out a production test on a southern well. They were waiting for an updated view on the reserves.
But the critical issue was Commerce Commission approval for the three partners to jointly sell the gas rather than to sell it in competition. The commission could not say how long the process would take. Submissions on the joint marketing application were due by February 28, after which the commission would issue a draft ruling. Further submissions and a conference would be held before the commission made a final ruling.

Source: The Dominion Post
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