The problems that last year plagued the start of the offshore drilling phase of the Pohokura project – including seabed instability that necessitated a second drill site for the jack-up Ensco Rig 56 – are now well behind partners operator Shell, Austrian firm OMV and Todd Energy.

And a six-month delay to the arrival in New Zealand waters of the jack-up Ensco Rig 107 – first due from Vietnam in March but now not due until September – has not thwarted the Kupe partners’ plans to have first gas from the Origin Energy-operated field by mid-2009.

Pohokura is the bigger of the two fields, with estimated proven and probable (2P) reserves of about 770 petajoules, or 700 billion cubic feet, of gas and over 50 million barrels (MMbbl) of condensate.

Gas and condensate from the first of the project’s six offshore wells started flowing to shore in mid-March.

Pohokura project manager Milan Hendrikse said these initial flow rates were better than hoped for and that he expected the onshore production station to be operating at full capacity of 200 million cubic feet per day of gas, once the other five offshore wells had been drilled and tied in to the offshore platform production facilities next year.

Three onshore wells were commissioned last September, with first commercial gas to market at that time.

Shell says Pohokura is a showcase development. The offshore wells were being drilled from “splitter designed” wellheads, which minimised the number of conductors required – a first for New Zealand.

It had also used water-based, rather than synthetic, drilling muds and disposed of the muds and drilling cuttings at a local worm farm to minimise environmental impacts.

Mud-coated cuttings are taken from the wellsites and transported to the vermiculture facility, where they are blended with special compost and then fed to worms, ultimately creating a fertiliser.

Horizontal directional drilling (HDD) was also a feature of the offshore-onshore pipeline. A 2km-long tunnel was drilled from behind coastal cliff faces, under the foreshore, and surfaced on the seabed beyond reefs, beach and shoreline cliffs. This method avoided the classical trench solution cutting across these environmentally sensitive features.

HDD was also used in the Kupe development, which has total 2P hydrocarbon reserves of about 389PJ in the central field area (CFA) being developed initially, including 253.5PJ of sales gas, 14.7MMbbl of condensate and 1.06 million tonnes of liquefied petroleum gas.

Drilling of the Kupe HDD pipeline route – linking the offshore products pipeline and umbilical to the onshore gas plant – started in January, from under cliffs to the onshore production station several hundred metres back from the cliff top.

New Zealand Oil & Gas senior geology manager Jonathan Salo said as well as the earthworks commencing, detailed design of the onshore gas plant, and the process of obtaining quotes and evaluating tenders for key equipment packages, had also started.

Long lead time equipment had been ordered, ensuring delivery well in advance of the start of drilling. Most of the casing and tubing had already arrived and was being stored at Port Taranaki.

Construction of the wellhead platform, including topsides facilities, is proceeding according to schedule in Thailand, and the platform is due to arrive in New Zealand in the third quarter of this year.

Salo said there was the potential for significantly increased reserves in the Kupe mining permit, with several potential prospects immediately adjacent to the CFA having the potential to contain another 200PJ of gas and associated condensate.

These included Momoho (formerly Stent), Denby, Marshall and Kupe South-4. Momoho-1 will be the first of perhaps several exploration wells drilled after the completion of the three CFA development wells.

Salo also said the production facilities were being built with substantial excess capacity to allow for increased volumes from any subsequent developments.

“The pipeline transport capacity from the production platform to onshore will be able to carry in excess of 200 terajoules per day, although the sales gas contract with Genesis requires about 70TJ a day to satisfy the production contract agreement,” he said.

“So there is abundant spare excess pipeline transport capacity available should additional reserves be proved up.”

Once it comes online, Kupe will significantly boost NZOG’s reserve base, annual production and revenue flow, Salo said.

The Pohokura partners are operator Shell Exploration NZ (48%), Austrian firm OMV (26%) and Todd Energy (26%).

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