Big boost for NZ’s gas supply – and a setback for the climate-change warriors

Here’s   a  bit of good  news  on the  energy  front to  mitigate some  of the  gloom  created by soaring costs, potential  black-outs and rising  carbon emissions.

Genesis  Energy  reported this week  New Zealand’s gas supply has been boosted  after a $72m project at the Kupe gas production station near New Plymouth has been  finished.

The inlet compression project, undertaken by Genesis and its Kupe Joint Venture partners, operator Beach Energy and NZ Oil & Gas, increases production back to the plant’s full capacity of 77TJs a day, the equivalent of supplying around 15% of NZ’s natural gas demand.

Genesis’ group manager Kupe JV Craig Brown said despite some Covid-19 supply chain delays, the project was delivered within budget and with no lost-time injuries from 170,000 person-hours on site – a testament to the strong safety focus of the team on the ground.

“In the current market it’s good news that Kupe is back to delivering to its maximum daily quantity, in line with forecasts and the field’s development plan,” said Brown.

It was the biggest development project since the Kupe gas field began production in 2009.

The compression project is like putting a vacuum cleaner at the production station onshore and sucking on the raw gas pipeline. It reduces back-pressure on the wells and enables the field to return to plateau production of 77TJ per day.

Equally  good  news  is  that  the  JV  partners are now investigating the potential for drilling another development well at Kupe to further increase recovery from the field.

And  Brown insists natural gas will continue to be an important fuel as NZ transitions to a low carbon future.  He   says Genesis “is pleased” to support the joint venture in maintaining supply through the coming years.

This is  one  in the  eye  for all the climate  change  warriors, and perhaps  for Jacinda  Ardern  who  had her “nuclear-free moment”  in 2018 when  the government placed a ban on any further  offshore  exploration  for  oil and gas.

This  week, too,  a government-commissioned report by the Gas Industry Company  reinforced  the  message  about  the  significance of  continuing   natural gas  supplies.   It  said the country needs to invest tens of millions of dollars to ensure sufficient natural gas to help with the move to 100% renewable energy by 2030.

And it warned the industry will need certainty in order to make the capital investment necessary to keep the industry going for the next decade or so.

“There is a real risk that not enough gas will be able to be delivered to major gas users, including electricity generators, during the transition out to 2030 and beyond.,” the report says, adding that the situation was manageable with investment.

“With industry coordination, and continued investment and good risk management across the energy sector, gas supply should be able to be managed to meet demand in the short to medium term.”

Gas Industry Company CEO Andrew Knight said there were enough natural gas resources currently available to cover the transition to 100% renewable energy without the need for offshore exploration.

“We need continual investment to make sure those resources are developed,” he said, adding the investment would be in the order of a couple hundred million dollars a year on average, over an eight-year period.

“And the industry would like to understand that customers are going to be there, customers would like to understand they’ve got secure supply.

“So those relationships all need to be put in place, well in advance, alongside the relationships required to ensure that gas will also be made available for electricity generation when there’s a dry year.”

Knight said the findings of the report would fit into a national energy strategy – setting out a clear strategy on how natural gas fits in to the transition to 100% renewable energy.

But  is the government  listening?

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