Greymouth principal John Sturgess said told EnergyReview.Net from Auckland that his company's proposals - which would see the effective merging of the Ngatoro and nearby Kaimiro production processes and Greymouth operating both fields - could see the life of Ngatoro extended by 10 years to perhaps 2018.
"In a small industry such as onshore Taranaki it's sensible not to have multiple infrastructures and multiple operators; rather integrating the existing infrastructure and, hopefully, extending the economic life of fields such as Ngatoro."
He said the Greymouth program would significantly enhance oil and gas recoveries and sales. Features of the development for the field, in mining licence PMP 38148, included full gas-lift and water-flood facilities, the gathering of all gas produced from the field for sale, major reductions in the cost of site operations and the drilling of at least one or potentially two new development wells.
The first development well, Ngatoro-G1, was scheduled for drilling next April, with a major well workover and fracture stimulation program planned after that.
Greymouth was also proposing that the Ngatoro field be remotely operated from the nearby Kaimiro field and production station, instead of the present mix of manned and unmanned facilities at the three Ngatoro production sites. Kaimiro, which Greymouth bought from Shell NZ earlier this year for an undisclosed sum, would process all Ngatoro hydrocarbons for a fee.
Sturgess said the disputed Goldie oil pool, within the Ngatoro licence, was not included in the Greymouth development plan and that High Court action, between Greymouth and Indo-Pacific Energy, was continuing.
NZOG subsidiary NZOG Services Ltd had developed a stand-alone scheme (Option A) for the field involving dedicated waterflood facilities for Pool-1only. Greymouth had proposed what it believed was a better, more comprehensive program (Option B) involving integrated water-flood, artificial lift, and gas injection facilities for all Ngatoro pools made viable as a satellite of the Kaimiro production facility.
To reduce the financial commitment of other parties and to ensure a fast-track development would be possible, "Greymouth has agreed to make available its adjoining Kaimiro water and gas facilities to maximise hydrocarbon recoveries," Sturgess said.
Greymouth would transport and process all Ngatoro well fluids at the Kaimiro production station for a fee, and also supply back to the sites water and gas-lift/injection gas at injection pressures and quality.
There would be no Ngatoro joint venture capital costs associated with this scheme, as Greymouth would supply additional major pipelines, with minor site connection works assumed to be covered by the sale of surplus Ngatoro facilities. On-going annual savings of about $200,000 would be possible a result of greater operating efficiencies.
"Option B is better on environmental, economic, hydrocarbon recovery and good oil field practice grounds," said Sturgess.
NZOG had concerns regarding production losses resulting from remote operation, but these were not considered valid for wells operating on artificial lift. Greymouth's experience at Kaimiro suggested any production losses, due to short shutdowns, would be recovered on restart as a result of wellbore storage.
Sturgess said key additional benefits of Option B were that all gas flaring would stop (about two bcf of gas has been flared since 1992) as would the practice of disposal of salty produced water into surface streams.
Gas would be available for gas injection purposes and gas from Ngatoro-5 would be accepted for blending at the Kaimiro station.
Wellhead rates would increase through gas-lift efficiencies and all Ngatoro-B wells being on artificial lift; all oil would be piped (oil from the Ngatoro B site was presently trucked offsite); and there would be increased viability of marginal Ngatoro pool discoveries.
Greymouth's processing fees associated with the supply of capital and services from Kaimiro to the Ngatoro joint venture were based on Greymouth receiving a 15% rate of return on its risk capital investment.
Sturgess said his company wanted the Ngatoro partners (Greymouth (59.57%), NZOG (35.43%) and Indo-Pacific Energy subsidiary Ngatoro Energy (5%)) to approve Option B later this month so Greymouth could then take over site operations, with the joint venture and Crown Minerals resolving all issues regarding marketing and royalties later.
Construction of the new facilities, the commissioning of Ngatoro A to Kaimiro production station multiphase flow, and the Ngatoro B tie-in and installation of artificial lift for Pool-2, were all scheduled for the first five months of 2003.
