Chief executive Murray Jackson confirmed from Auckland that Genesis Power was still evaluating options for a 400MW combined-cycle gas power station to be operating at Huntly from December, 2004.
Clearing of the site for the proposed new plant would start in the second half of this year. The new station would be 56% efficient, compared to the 36% efficiency of the existing 1000MW Huntly station, and would use about 20PJ per annum of gas, Jackson said.
Last week Contact Energy announced it had put on hold plans to have a third gas-fired station operating at Auckland. Contact chief executive Steve Barrett said the development of the third 400MW gas-fired power station at its Otahuhu site would not go ahead until sufficient gas supplies were guaranteed and problems with the transmission regime applying to new gas supplies sorted out. Contact had also planned its new combined-cycle plant to be up and running from around late 2004.
Swift Energy had started delivery of gas from its south Taranaki Rimu oil field as part of a long-term (10-year) contract, but that was not the only gas Genesis would be using at its existing and new Huntly plants. Contracts regarding the delivery of gas from other Taranaki fields were being finalised, added Jackson.
One of the main sources of new gas would be the presently undeveloped offshore Kupe gas-condensate field to the south of Taranaki.
"Kupe will ensure reliable gas supplies for the life of the Huntly combined cycle gas thermal plant," said Jackson. Proven Kupe reserves were about 260PJ of gas and 15 million barrels of oil.
Kupe was planned to come onstream after Maui, though the present Maui redetermination issue had clouded the issue. "We are currently waiting for the Maui redetermination quantities," said Jackson.
Maui owner Maui Development Ltd shocked New Zealand late last year when it announced the country's single largest energy resource could be depleted as early as mid-2007 and not the contracted 2009. The first meeting to reassign total remaining reserves was held in Wellington last month, but the signs are not good for a speedy resolution of this critical issue.
Jackson said Genesis, which now held a 70% stake in the field, would be the long-term gas purchaser the Kupe partners needed to ensure development was viable.
Genesis, along with New Zealand Oil and Gas (which holds a 19% interest in Kupe) and the Government (which still has its 11% "free carry") would, in the near future, need to appoint an oil company to act as operator of the licence.
Kupe was discovered in 1986, but previous attempts to develop the marginal field foundered because of relatively low gas prices and the lack of a long-term gas purchaser.
Jackson added that the number of new developers emerging, who were active in the Taranaki Basin, promised a busy future for the oil and gas industry.
However, he warned open pipeline access and appropriate pricing for the transportation of gas through monopoly pipelines were essential elements for the future of the gas market. "The government needs to move on now on these issues, rather than wait until the Maui pipeline becomes redundant."
