Go go Pohokura

Shell NZ, Todd Energy and OMV have given the green light for the Pohokura project, with capital expenditure estimates ranging from as low as NZ$400 million to NZ$1 billion.
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The partners yesterday afternoon signed off the Final Investment Decision (FID), with Shell NZ EP commercial manager Ajit Bansal saying FID signalled the formal start of the development of the near-shore north Taranaki field.

“It is now all systems go for Pohokura. With the taking of FID today, the joint venture has instructed the operator, Shell Todd Oil Services to lodge a petroleum mining permit application with Crown Minerals,” Bansal said last night.

“Today’s announcement follows the sale of the first tranche of gas in Pohokura by Shell and our joint venture partners, and those sales, along with today’s FID, now underpin the development.”

Bansal said Shell was still anticipating first gas from Pohokura by mid-2006. “We are confident that the project is on track to deliver first gas in mid 2006. Given New Zealand’s critical need for more gas, Shell is very aware that Pohokura needs to be up and running in a timely manner.

“Today sees the start of a project that will prove to be every bit as vital to the future energy supply of this country, as Maui was when it commenced production 25 years ago.”

Though Pohokura may only be one quarter the size of Maui, it could contain up to 1 tcf of recoverable gas. The project will initially involve only one offshore platform, in the central part of the field, up to nine wells, an onshore production station and associated pipelines.

The green light for Pohokura, coupled with FEED approval for the more southern Kupe field announced earlier this week, means at least two almost simultaneous major energy developments for Taranaki - first Pohokura gas is scheduled mid-2006 with first Kupe gas a year later.

There are also the small Tui and Amokura (and possibly Kiwi and Pateke) oil discoveries in PEP 38460 - which could be developed by 2005-06. As well, OMV and its Maari partners could also decide to develop that oil field south of Maui within the next few years.

If all these projects proceed, then the already busy Taranaki engineering sector and buoyant region will face some very exciting times, perhaps even to the end of the decade.

Bansal said the Pohokura sign off was a significant day for Shell in New Zealand. “With the recent agreement which will see more gas extracted from the Maui field, and now final confirmation that Pohokura will become a reality, Shell is proud of the continuing part we are playing in securing New Zealand’s energy future.”