Origin Energy Kupe project director Peter Ashford said yesterday that the Technip-Origin Energy alliance was making good progress with the $NZ1.08 billion ($A960 million) project.

Construction of the onshore production station, designed by Technip in Kuala Lumpur, Malaysia, was almost 50% complete, Ashford said at the production station site in south Taranaki.

“Onshore progress is a little behind schedule, but we are extremely pleased with offshore. The platform is now finished and we should be drilling by the weekend.”

The jack-up Ensco Rig 107 completed putting the 470-tonne topsides on the already-installed 550-tonne platform early Tuesday morning and the module was being welded onto the jacket.

The Ensco rig would then start drilling the first of three development wells into the central field area (CFA) of the Kupe prospect – a task that should be finished by next April or May.

Ashford said the next important event would be the arrival in early January of the specialist pipelaying vessel Apache.

The reel barge had already picked up the Kupe umbilical, which was manufactured in Corpus Christi in the United States, and was now in the mid-Pacific en route to New Zealand. It was expected to arrive about January 4-7.

Ashford said the Apache would load welded sections of pipe, up to 10km in total length, at Picton, near the top of the South Island, before transporting them north to Taranaki waters.

The Apache would then lay the pipe from near the south Taranaki coast out to the Kupe platform, 30km offshore. In good weather, the Apache could lay up to 1km of pipe per hour, much faster than an ordinary lay barge.

Parts of the offshore pipeline and umbilical would be buried in a subsea trench, while other parts would be supported above the rocky near-shore by specially designed concrete mattresses, the same type as those used in the more northern Pohokura gas-condensate project, Ashford said.

The specialist dive support vessel Rockwater-2, which helped lay the flexible pipelines and umbilical for the Tui Area oil field development, would also be involved in similar work with the Kupe project.

Offshore work on the pipeline and umbilical should be finished by April.

The Kupe venture plans to drill up to an additional three wells in the petroleum mining permit after about 10 years of production from mid-2009. This would drain the CFA and maintain flow rates from the field.

Kupe will supply about 254 petajoules of natural gas, 1.1 million tonnes of liquefied petroleum gas and 14.7 million barrels of condensate over the project’s expected 15-plus years of life, according to Origin.

Each partner will sell its own percentage of gas, condensate and LPG. Origin has already sold its 50% share of gas to integrated energy company Genesis Energy, the second-largest Kupe partner.

Most condensate will probably be exported from Port Taranaki to Asia. Ashford said the initial flows, of about 7000bpd would provide “a nice additional revenue stream”.

The Kupe joint venture is having two storage tanks and export facilities constructed at the Omata tank farm above Port Taranaki to hold the condensate.

Two of several main piperacks were at the site of the production station and construction of the operational building had started. About 20-25 operators, five per shift, would operate the normally unmanned platform and production station, according to Ashford.

About 120 people onsite had so far worked over 1 million hours without a single lost time incident.

A peak construction workforce of about 900 is expected in about nine months. About 90% of the present workforce is from Taranaki and about 30% of the equipment has been manufactured or supplied by Taranaki companies.

Once the raw gas stream has been treated at the production station, condensate and LPG will be taken by road tankers to the port. Gas will be piped inland to the nearby Kapuni processing plant, owned and operated by Vector subsidiary NGC, for reticulation in the North Island high-pressure pipeline network.

The Kupe partners are operator Origin (50%), Genesis Energy (31%), New Zealand Oil & Gas (15%), and Mitsui E&P NZ (4%).