LNG talk needs reality check: NGC

While Contact Energy and Genesis Power are forging ahead with their LNG feasibility study, NGC boss Phil James says it's premature to talk of LNG as a realistic option to this country's gas woes.
LNG talk needs reality check: NGC LNG talk needs reality check: NGC LNG talk needs reality check: NGC LNG talk needs reality check: NGC LNG talk needs reality check: NGC

James also believes there are several Taranaki gas discoveries just waiting to be developed and says they will be if NGC can help bring them onstream.

"We do not share that (Contact-Genesis) view yet and believe it's too early to say LNG is a realistic option, primarily because of cost. We also believe there is plenty of indigenous gas and the right climate to develop that," James told EnergyReview.Net.

While not specifying prospects, James said he agreed with Indo-Pacific Energy chief executive Dave Bennett's bullish assessment of onshore and near-shore undeveloped gas reserves in Taranaki. "If Dave's bullish then I'm bullish."

Earlier this month Indo-Pacific Energy said it wanted to list on the New Zealand Stock Exchange and raise up to $NZ8 million to help fund further oil and gas exploration and development.

Bennett said several prospects, including Cardiff, Orca, Humpback and Akama, had the potential to contain several tcf of gas and effectively solve this country's looming gas supply crisis.

"From our market intelligence there are several hundreds of Petajoules of gas, at the P50 level, ready for development and the scene is about right for that development to occur.

"We are anxious to strike more deals and believe we have a unique combination of infrastructure, expertise and balance sheet capability; we have money," James added, referring to agreements earlier this year with Indo-Pacific regards Kahili gas, and Westech Energy regards Surrey gas.

ERN this week reported that Contact and Genesis hoped to have appointed a party before the end of the year to help them finalise their preferred LNG project for New Zealand; having called for requests for proposals to decide on a preferred regasification plant size, location and likely landed costs.

James said discussions regarding the new delivery profiles for the remaining gas from Maui had been going on since February, but he was not disheartened with the slow progress, given the complexity of the matter.

He expected that to be resolved early next year and then there would no more gas "overhang", with only contracted quantities being delivered.

Last February the Maui independent expert, Netherland Sewell and Associates, found there were only 370PJ - less than two years' supply - of economically recoverable reserves remaining at the Maui contract gas price.

James said Genesis' 1000MW dual-fired Huntly power station would be critical in demand side gas economics - "because it will dwarf other demand" - until the possible 1 tcf Pohokura gas field came onstream in mid-2006 and the smaller Kupe field from 2007. Huntly used to burn 80% gas and 20% coal, with that ratio now being reversed.