The DominionPost has reported Origin's general manager of public and government affairs, Tony Wood, as saying Kupe development costs could be as high as NZ$350-400 million, depending on what options are chosen.

Wood said Origin, which took over as Kupe operator from Genesis Energy last February, and its partners wanted to examine some key development options during the next 12 months, including whether the partners would build their own gas processing facilities or use existing infrastructure.

Origin would examine regulatory issues, including Treaty of Waitangi and resource management matters, in relation to such things as an offshore production platform and pipeline to shore.

It is known Swift Energy’s Rimu production station, which can be easily expanded, could be suitable as any offshore Kupe pipeline would land near the Swift facilities.

Wood said Origin expected to have six staff in New Plymouth once field development got under way. At present the project was being managed from Melbourne and Sydney.

The Kupe field is the second biggest undeveloped Kiwi petroleum resource behind the more northerly and possible 1tcf Pohokura gas field. Kupe contains proved and probable reserves of over 230 PJ of sales gas, plus considerable condensate and LPGs, with additional reserves potential within the mining licence.

A final investment decision is expected by mid-2005 and first gas to shore by mid-2007. Likely production is around 20 PJ per annum of gas and the order of 1.5 million barrels of liquid hydrocarbons (condensate and LPG).

Origin paid Genesis Energy NZ$33 million for a 50% stake in the field and has agreed to sell its share of gas to Genesis, primarily for use in Genesis’ planned (385MW) second gas power station at Huntly.