New Zealand looks to CSM

COAL seam gas extracted from New Zealand’s significant coal reserves could supply up to 10% of the country’s needs from the turn of the decade, according to industry players.

About eight companies are involved in CSM exploration in New Zealand, but Christchurch-based L&M Group and government-owned Solid Energy are the two main players.

Both companies have several CSM exploration permits, with L&M completing the largest single assessment of New Zealand’s coalbed methane gas potential.

L&M also holds the largest proportion of over 20 CSM permits scattered around the country, but centred on the Waikato and Southland.

It is working with CRL Energy to assess the potential of its permits, which it believes could hold 240-300 petajoules of total recoverable gas, although it is still uncertain about likely flow rates.

L&M managing director Greg Hogan says his group has finished the initial exploration phase in all its permits and within the next 12 months will be evaluating the various commercial opportunities available.

“We have enough information from our pre-feasibility studies that indicate varous commercialisation options, which all look pretty positive,” Hogan told EnergyReview.net.

“We have completed our scoping studies, looking at mining and construction costs, and are encouraged enough to certainly believe there are some real projects here that we can bring to fruition.”

One of the most promising fields is Hawkdun, in Central Otago, where initial indications point to 25-40PJ of recoverable gas. L&M has also explored six other fields – the North Island Maramarua, North Waikato, and South Island Ohai Mataura, Kaitangata and Ashers-Waituna.

L&M is also continuing with various economic and environmental studies over its permit areas.

Hogan says geologists believe improved technology and New Zealand’s significant coal reserves mean that CSM gas could supply up to 10% of the country’s needs from 2010 onwards.

New Zealand presently uses about 150PJ of gas a year and has about 15,000PJ of existing known petroleum gas reserves.

Solid Energy is also exploring for CSM gas and is focusing on extracting methane trapped in deep coal seams in the North Island North Huntly and Rotowaro coalfields.

“We are working jointly with North American company Resource Development Technology on several pilot schemes and have drilled test holes at several sites. We are just finalising the next stage, which will include up to five pilot production wells,” says company spokeperson Vicki Blyth.

Solid Energy estimates the North Huntly field could hold a total of 300PJ and produce 10-20PJ of gas a year. This would make it similar in size and possible production rates to the offshore south Taranaki Kupe gas-condensate field.

The government company expects to make a commercial decision on whether to proceed by 2007.

Blyth says Solid Energy is also part of an A$30 million Australasian project to store and monitor carbon dioxide gas in deep geological formations – a trial greenhouse gas sequestration project.

The Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) is scheduled to this year start the project, which involves about 40 Australian and overseas researchers, including Solid Energy and New Zealand’s Institute of Geological and Nuclear Sciences.

Solid Energy's participation includes about NZ$2 million (A$1.8 million) to the overall CO2CRC program and is part of the company’s commitment to research practical projects aimed at reducing the environmental impacts of coal use in New Zealand.

The pilot project will simulate the capture of CO2 from a power station, the transportation by pipeline and storage of CO2 in geological formations in western Victoria.

Over the two years that CO2 could be injected, scientists will monitor the behaviour of the gas in an effort to demonstrate that CO2 capture and storage is a viable, safe and secure option for greenhouse gas abatement.

A few similar projects exist in the Northern Hemisphere, however this pilot will be the first to geologically store and monitor the CO2 before, during, and after its injection in deep geological formations.

Other players include Westech New Zealand, which is planning to drill six new wells in sites south of Auckland next year. Westech NZ, a subsidiary of Energy Corporation of America, owns several CBM licences in Auckland and the Waikato.

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