AWE New Zealand operations manager Dennis Washer said the greater than anticipated performance of the Tui project had already prompted the partners to commission a study investigating possible ways of reducing, or even eliminating, the present flaring of up to 17 million cubic feet of gas per day.

He said options included laying a pipeline to tie into nearby infrastructure or reinjecting the gas.

"This is a very conceptual study and we will be looking at everything over the coming months to see what we can do to reduce flaring," Washer told PetroleumNews.net in New Plymouth.

"We want to move to a point where we are not wasting any gas at all."

Washer said the Tui Area project was consistently outperforming pre-production forecasts and that was posing problems concerning the amount of gas being flared.

Those forecasts had oil production falling from over 40,000 barrels per day to less than 18,000bpd within a year.

However, the floating production storage and offtake vessel Umuroa was still processing over 40,000bpd after more than 10 months of production.

While most of the associated gas was being flared, as much as 10% was already being used to run various facilities aboard Umuroa.

Washer denied local media reports that this level of flaring was excessive.

"We still consider the amount of flaring will be reduced significantly in the coming months if oil production continues to decline."

He added that the Tui partners were working on a development project for late 2009 that could be associated with the flaring issue onboard the Umuroa but did not specify what that involved.

Associate Energy Minister Harry Duynhoven said he would be concerned if AWE and its partners continued flaring large quantities of gas for several years.

However, the Taranaki Daily News quoted him as saying he was sympathetic as the partners now expected to recover far more oil than first anticipated.

Tui's 2P (proven and probable) reserves have increased by over 68%, from the pre-production estimate of 27.9 million barrels to 47MMbbl.

Tui has produced over 13.5MMbbl since production started last July.

The paper quoted Duynhoven as saying: "Obviously reticulation is best. But if it's not viable to reticulate what do you do?"

The Tui partners are operator AWE (42.5%), Mitsui E&P New Zealand (35%), New Zealand Oil and Gas (12.5%) and Pan Pacific Petroleum (10%).