Last month Todd Energy called for tenders on the 100PJ of gas it will have available from early 2004 and, according to Crown Minerals, this is virtually all the estimated recoverable gas from both onshore Taranaki fields. Managing director Richard Tweedie said Todd was inviting interested parties that consumed more than 1PJ of gas a year to take part in a sales process to auction the gas over the next month.
Commentators are now saying the imminent expiry of the McKee-Mangahewa gas contracts - between Todd Energy and methanol manufacturer Methanex NZ - has come at a very good time for Todd to gauge the strength of the New Zealand gas market.
"This is the first significant parcel of gas to come on to the market for a while and nothing else is scheduled until the first tranche of Pohokura gas, perhaps late this year or early next," said one commentator.
"By the end of this bidding round Todd will know exactly who is interested in McKee-Mangahewa gas and exactly what they are prepared to pay."
He said that would be very valuable information for Todd and the other Pohokura partners - Shell New Zealand and OMV Petroleum - as they prepared to auction the first tranche of gas from their possible 1tcf near-shore Taranaki field.
"Todd will probably say 'thank you very much' for the McKee and Mangahewa information and use it accordingly, that's a very good tactic," said a second analyst.
All major users - from the formerly biggest user Methanex, to Contact Energy, Genesis Power, NGC and even the Ballance ammonia urea plant - are expected to bid for gas from the onshore Taranaki McKee and Mangahewa fields.
The big power generators Contact and Genesis need assurances of gas to fuel their gas-fired stations, while NGC seems intent in snaffling every bit of gas it can get. NGC's contracts with Methanex expire early next year and with the ammonia urea plant in May 2005.
Also Methanex is desperate to keep at least one of three Taranaki methanol trains operating next year and may be prepared to pay high gas prices while world methanol prices remain strong.
Concerns about market dominance by the Pohokura partners - who also happen to be the Maui partners - were one of the highlights of the Commerce Commission's July conference into Pohokura gas marketing.
Several speakers at the conference said they were concerned about the extensive cross-linkages of the partners, particularly Todd, which could allow them to manipulate the market.
The commission subsequently cleared the partners to jointly market and sell their gas, subject to three conditions - that the partners only jointly market and sell gas after June 2006 if the Pohokura field is fully operational; that the commission clear any sale of any interest in the field: and that the partners allow reselling of gas to third parties.
EnergyReview.Net could not contact Tweedie for comment as he is overseas.
