DRILLING

Ihi well a possibility for semi sub

Industry politics continue over Maui - New Zealand's largest but fast dwindling energy resource -...

Ihi well a possibility for semi sub

It is known the Maui partners - Shell New Zealand, Todd Energy and OMV - have discussed using the Ocean Bounty to drill a well into the Ihi prospect-play within the Maui licence.

However, the well will not go ahead without changes to the present arrangements regarding gas pricing and Maui pipeline access.

Industry commentators say the government, which buys Maui gas, and the big three users Methanex, NGC Holdings and Contact Energy, will have to agree to increased wellhead prices as well as working together on open access to the Oaonui-Huntly pipeline for non-Maui or different specification gas before wells such as Ihi can go ahead.

"It's not a done deal and there are several things which will need to change before Ihi, and perhaps other bypassed pockets of gas, will be worth developing," said one commentator.

It is understood the Maui partners think about 90 Petajoules of "stranded" Ihi gas could be recovered, but that the gas is believed to have a high carbon dioxide content. Such gas would be useful to Methanex as it helps the methanol manufacturing process (Methanex already takes CO2 rich Kapuni gas) but that a $NZ40 million CO2 extraction plant would be necessary before any other users would take the gas.

"Ihi represents a major risk without an appraisal well, but no capital expenditure will be approved unless the Crown and the buyers make it an economic proposition to drill by agreeing to some changes."

The commentator warned that such changes needed to be made within the next three years for Ihi and perhaps other wells to go ahead. "Once the partners have abandoned the Maui field it will be too late."

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