However, more gas-fired power stations or other significant gas users would not be possible without further discoveries, he warned.
“The market will be pretty well covered for quite a few years but if electricity generators want to build another e3p [Genesis Energy’s 385MW plant being built at Huntly], they would have problems financing such a project over 15 years if supplies remain the same,” Beggs told EnergyReview.net today.
“Bankers are not going to want to finance a 15-year project if known gas reserves are only nine years – that’s the Catch-22 situation New Zealand faces.”
He said the 200 petajoule Ihi prospects presently being drilled from the Maui A platform, and the 154PJ Turangi field that Greymouth Petroleum announced last May, meant known gas reserves (proved and probable) should be able to supply New Zealand’s 150PJ per annum gas market for nine, perhaps 10, years.
The 750PJ Pohokura field, due to come onstream later this year, and the 253PJ Kupe field, due to come onstream by mid-2009, are to supply existing gas users, largely electricity generators.
“They will be absorbed into the market immediately and not allow significant additional growth.”
Beggs yesterday addressed the Energy Summit conference in the capital and said he welcomed the Crown Minerals’ proposal of more full and frank disclosure of oil and gas reserves.
The reporting costs associated with six-monthly updates might be too expensive, but some regulations were needed to ensure more adequate reserves disclosure.
Beggs forecast that New Zealand could discover two or three Pohokura-size gas fields within the next 20 years. A bigger gas field in a frontier region was both “hopeful and plausible”.
“New Zealand is at a critical juncture in establishing [or not] the potential for as yet undiscovered oil and gas resources to affect our economic future.
“Market and policy signals are not yet sufficient to entice exploration investment at a level that can be relied on to effect continuing discoveries.
“Exploration investment since the Maui re-determination has been concentrated in proximity to existing production and infrastructure, but is now beginning to spread to promising frontier areas.
“If the costs and risks attendant on operations in such areas seem prohibitive, they need to be considered against the alternatives of a national energy supply system underpinned by either LNG imports, or even nuclear power,” he told the conference.
