The gas-hungry methanol manufacturer has signed an agreement with US company Westech Corporation and “local” player Bridge Petroleum for the rights to gas from two Radnor wells due to be drilled from next month in the strategic onshore Taranaki licence PEP 38752.

Bridge executive Ed Davies has confirmed the agreement to EnergyReview.Net but declined to detail specifics, while Methanex NZ managing director Harvey Weake has offered no comment.

However, it is believed Methanex is funding the drilling and testing of Radnor-1 and 2, which could cost up to NZ$30 million, in return for exclusive rights to purchase any commercial gas discovered. The Radnor wells are to test several Eocene-aged Kapuni formation deep gas targets identified in a 2003 3D seismic survey.

Colorado-based Davies told ERN that operator Bridge (which holds a 66.67% interest in the permit) and Westech (33.33%) had entered into an agreement with Methanex NZ for the purchase of gas from the Radnor wells. The Parker Drilling Rig 246 is scheduled to spud Radnor-1 on August 1 and Radnor-2 from the same pad straight afterwards.

Commentators say the PEP 38752 licence and particularly the Radnor wells are very interesting, given the past performance of the 1983 Stratford-1 and 1990 Stratford-1A sidetrack wells and the fact that a pipeline to the Methanex plants runs right nearby.

“The Radnor wells will be very interesting ones to watch. The licence could contain 50 or even 80 Petajoules of recoverable gas, which would be very nice for Methanex and enable it, along with its extra Maui allocation, to keep running one of its three trains for a few years past 2005,” said one commentator.

Last month major downstream player Contact Energy won an offshore Taranaki licence on the Western Platform, while Genesis has just signed off an agreement with Austral Pacific and partners for the funding of the Cardiff-2 well later this year in return for all deep gas produced.

While a second commentator wished the downstream players luck with their respective exploration efforts, he cautioned against any undue optimism.

“The Radnor and Cardiff wells will essentially be redrills of old wells and, while you can have much more confidence in them than in wildcats, exploration is still a risky business and you really need a diversified portfolio which downstream players cannot afford.”

Stratford-1 flowed up to 2.5 million cubic feet per day of gas for then operator Petrocorp and Stratford-1A, it is believed, even more. While the gas was relatively rich in carbon dioxide (which is good for methanol production) it also had a high water content.

Success with Radnor and any other wells could mean an easy tie-in to the nearby LTS line, which used to pipe CO2-rich Kapuni gas to the Methanex plants.

“Even though plans are now for Kahili gas to be piped down that line to NGC’s Kapuni treatment plant, in the event of a major Radnor strike Kahili and Radnor gas could be piped north to Methanex, though that would also involve some gas swap arrangements,” added the first commentator.