Swift echoes NZ gas woes

New Zealand's almost perilous gas position has again been highlighted, this time by Swift Energy executive vice-president Bruce Vincent who likens the situation to a speeding car about to hit a brick wall.
Swift echoes NZ gas woes Swift echoes NZ gas woes Swift echoes NZ gas woes Swift echoes NZ gas woes Swift echoes NZ gas woes

Vincent today told the Independent Petroleum Association of America - at a San Francisco oil and gas symposium - that things had changed markedly for Swift since it came to New Zealand in the late 1990s.

At that time the country had a low-priced gas market. Then last January everything changed when the Maui Independent Expert Netherland Sewell and Associates' final report said the formerly giant field would be totally depleted by 2007.

"That's like you're driving a Porsche at 100 miles an hour and find a brick wall 10 feet in front of you," Vincent told the symposium.

Swift Energy, which had been averaging about $US1.75 per Gigajoule for its New Zealand gas, expected gas prices to climb to $US3-4 per GJ - about the same as Royal Dutch Shell executives predicted at the 2002 NZ Petroleum Conference.

According to a graph Vincent showed the symposium, Swift Energy and Crown Minerals believed gas demand was already exceeding supply and that situation would worsen markedly from 2005-06 onwards.

Even with the possible 1tcf Pohokura field and the smaller Kupe discovery coming onstream by 2006-07, there would still be significant supply shortfalls, leaving big users, possibly including Methanex, fighting for what gas they can get.

Vincent, who is in charge of corporate development for the Houston-headquartered company, added that Swift Energy still believed there were significant probable and possible petroleum reserves to be extracted from its Kiwi properties - Rimu-Kauri, Tawa and Matai in southern Taranaki and Tawn (Tariki, Ahuroa, Waihapa and Ngaere) and Tuihu further north and inland. Current total proved reserves were about 155 billion cubic feet equivalent (bcfe).

Kiwi capital expenditure this year would amount to approximately $US25 million, compared to $US27 million in 2002, and it was also possible Swift Energy would build a pipeline to link the Rimu production station and the Tawn facilities together. This would give the company significant, if not dominant, control of infrastructure in the south-east of Taranaki.