It is extending its Hutt Valley pipeline from Petone into Gracefield and Seaview, and is considering taking the pipeline into central Lower Hutt. It is also considering spending about $NZ3 million to build a treatment plant at Wellington's southern Happy Valley landfill, according to Nova manager Graeme Clearwater.

Earlier Nova had shut its gas treatment plant at the more northern Porirua landfill because too little gas was being recovered to make the operation economic. However, New Zealand's rapidly strengthening gas market could make the Happy Valley project more viable, Clearwater said.

Nova has about 400 industrial and commercial customers nationwide and pipelines in the parts of Wellington, south Auckland, Hastings and Taranaki. Its gas comes from the Kapuni field in south Taranaki.

Meanwhile, government-owned Genesis Power and paper maker Norske Skog are considering building a 100MW cogeneration power station at Kawerau in the Bay of Plenty.

Engineering consultants Sinclair Knight Merz are doing the four-month feasibility study into the project, which would use prototype "open cycle gas turbine" technology, The proposal will include the Carter Holt Harvey pulp plant at Kawerau and Fletcher Forests' nearby sawmill and timber-drying plant.

Genesis chief executive Murray Jackson yesterday said the benefits of the cogeneration plants for large industrial customers included a stable electricity price and a source of reliable heat and steam for processing. Building the Kawerau plant would also alleviate transmission constraints in the central North Island and reduce greenhouse gas emissions.

Genesis already runs a 40MW cogeneration plant for Carter Holt Harvey's Kinleith mill at nearby Tokoroa.

Government officials are presently studying a Genesis request for help in underwriting the construction of its proposed e3P gas-fired power station at Huntly.