By the OGJ Online Staff
LONDON, Dec. 13 -- New Zealand's only major offshore gas reserves will be downgraded in negotiations between the government and operator Maui Development Ltd.
Maui Development is 87.5% owned by Royal Dutch/Shell Group, which has told the government that Taranaki field is expected to end production 2 years earlier than expected in mid-2007. Todd Petroleum Mining Co. Ltd. has 12.5%.
The redefinition of reserves means that there might be insufficient gas left to meet fulfill contracts between Maui Development and the New Zealand government. Maui Development sells gas under a take-or-pay contract to the government, which resells it to power companies such as Contact Energy Ltd., industrial users such as Methanex Ltd., and wholesalers such as Natural Gas Corp.
Lloyd Taylor, Maui Development chairman, said, "MDL expects to be in a position by March 2002, when current reserves estimation studies will be completed, to meet with the government and begin to agree a new Maui reserves figure.
"Essentially this process allows a matching of the quantities to be delivered from the Maui field with the latest estimate of the remaining reserves in the field."
Current estimates are that the field has 1.25 tcf remaining gas reserves and 57 million bbl of condensate.
The field was brought on stream in 1979 with the Maui A and B platforms. Together, with the small onshore Kapuni development which was discovered in 1959 and is near the end of its life, the fields supply around 90% of New Zealand's gas as well as significant quantities of condensate, liquefied petroleum gas, and oil.
The unmanned Maui B sends gas and condensate through a 15 km pipeline to Maui A. Production from both platforms goes 35 km to shore for treatment at the Oaonui plant on the southwest coast of Taranaki.
Gas is delivered to wholesale customers through the Maui pipeline from Oaonui to Huntly. In addition to its use for electricity generation, some gas is used to make methanol in Taranaki.
In 1993 New Zealand's first offshore oil was discovered beneath the gas field and, in 1996, a floating production, storage, and offloading vessel was installed.
The converted tanker, moored near Maui B, treats and stores the oil and transfers it to shuttle tankers. The crude mostly goes to New Zealand Refining Co. Ltd.'s 106,000 b/d Marsden Point refinery at Whangarei.