The Auckland-headquartered company said on Friday that Crown Minerals had granted it a petroleum mining permit (PMP 38161) over nearly all of the former exploration licence PEP 38762, enabling Greymouth to progress planning for long-term field development.

Company chief operating officer John Sturgess said development plans for Turangi, which encountered multiple Eocene-aged Kapuni group sands when drilled a year ago, were well advanced. The commissioning of gas export was now awaiting interconnection to gas trunklines and the finalisation of condensate off-take arrangements.

“We are delighted with the results of Turangi-1. It confirms that material hydrocarbon reserves can be identified by New Zealand-owned and operated oil and gas explorers. Discovery of these gas reserves increases the potential for further sizeable gas finds,” said Sturgess.

Greymouth expects to export specification gas from later this month at initial delivery rates of 10 terajoules per day. Contracting with interested gas purchasers would be finalised when a firm gas delivery date had been established.

Sturgess said information gathered during the initial production phase would assist in determining the feasibility of long-term gas cycling in the richer sand sequences.

Greymouth had fast-tracked development of Turangi so PMP 38161 gas reserves could be made available to maintain “fairly priced” fuel supplies to gas users in the petrochemical, power generation, dairy, meat processing, timber processing and other sectors.

Two months ago, rumours were rife that Methanex was to take Turangi gas to keep its sole New Zealand methanol plant operating at part capacity past mid-2006.

Sturgess said independent petroleum engineering reserves assessments had proven and probable (P2) reserves of 154PJ of gas and 5.10 million barrels of condensate from the Turangi and Ohanga areas of PMP 38161. The Turangi development would involve the co-development of Ohanga area gas, discovered by earlier wells in PEP 38762.

Greymouth and Todd Petroleum are nearing the end of a bitter battle over territorial access to Ohanga reserves with the surface location of Ohanga-1 in PMP 38161, the surface location of the Ohanga-2 well in a nearby Todd-controlled permit, but the bottom-hole locations of both wells within the new Greymouth permit.

In other news, Greymouth confirmed the arrival in New Zealand of four reciprocating gas engines and associated power station equipment acquired late last year and imported from Western Australia.

Sturgess said Greymouth was embarking on a step-wise investment program to meet anticipated growth and demand in the power generation sector, in a way that limited strain on the existing delivery infrastructure.

Greymouth’s power investment program would be fuelled by, and integrated with, the company’s Taranaki gas developments and would make full use of the Maui pipeline open access arrangements to offer integrated low-cost energy solutions.