The two companies have formed a joint venture - Coal Bed Methane Ltd - to assess the reserves and, if viable, extract methane gas from sub-bituminous coal resources up to 1000m deep.
The joint venture will explore in the North Huntly coalfield and part of the northern areas of the Rotowaro coalfield under the exploration permit PEP 38605 granted to RDT in 2002.
Initial studies indicated this methane resource could be equivalent to a 300PJ gas field, up to 70% of which could be extracted over 20 years. Solid Energy customer Genesis Energy uses around 60PJ of coal and gas in its nearby Huntly power station.
Joint venture work would start with four or five exploration holes in early 2005 to evaluate estimated gas volumes and to confirm the viability of extraction. A pilot extraction programme could start in 2006, according to Solid Energy chief executive Don Elder.
“With the run down of Maui gas and increasing pressure to develop new sources of electricity generation and industrial energy, coal bed methane could make a significant contribution to meeting New Zealand’s increasing energy in the next five to ten years,” Elder said.
