Company chief executive Dave Bennett said that a recent pressure survey at the Kahili-1A/B wellsite had provided the basis for a substantial upgrade in reserves. Laboratory analysis of the wellstream revealed that in addition to nearly 40 barrels of condensate per million cubic foot of gas, there was also some 35 barrels per million of LPGs (liquefied petroleum gases).
"This will add significantly to the market value of the wellstream, especially at present high prices. Options for enhancing the flow rates from the well are being considered; and the other exploration and appraisal options in the permit are also being evaluated for future drilling," Bennett said.
The Kahili Marketing Study had identified three main options for sale of gas from the field. Bennett told EnergyReview.Net that the Kahili partners had already received one of three expected marketing proposals from the parties involved.
He declined to comment on those options, though it is understood one involves the selling of Kahili gas to NGC and the subsequent pumping of that gas to the nearby Taranaki Combined Cycle power station. NGC used to own TCC but recently sold it to Contact Energy.
However, NGC has bought Energy Gas Contracts Ltd from Shell New Zealand and the sole purpose of EGCL is to supply gas to TCC.
Another option is believed to involve energy lines company Powerco and onsite electricity generation with subsequent sale to Powerco; or the sale of the treated gas to Powerco.
Bennett added he expected the Kahili Field (in which Indo-Pacific holds 45% equity) would be in production in the latter part of 2003.
He also said that operations had commenced at the Cheal site, and it was expected production testing of the gas and oil bearing sands in the Cheal-1 and 2 wells would start late this month. The rig arrived from the US during February, and was already located on site; the Cheal-2 wellhead had been exposed; and site works were in progress.
The intention was to conduct a one-month flow test of each well to establish the proven reserves figures needed to win customers, leading to the development of the field.
