Todd has applied to Crown Minerals for a petroleum mining permit, PMP 38162 covering 244 square kilometres, but is unsure of when any development might proceed, given New Zealand’s adequate gas supply over the next few years.

Todd managing director Richard Tweedie said from Wellington this morning that his firm and Canadian company TCPL Resources have finished a front-end engineering and design study.

The maritime development option involves delivering Karewa gas into a waiting carrier, where the gas would be compressed, shipped to shore, and then fed into the North Island high-pressure system.

“The FEED study concluded that the technology is more cost-effective than a pipeline to shore, given the distance that Karewa is offshore, probably 50 to 60 nautical miles,” Tweedie said.

He said Todd had recently upgraded its 2P (P50) gas reserves for Karewa from 60-150 billion cubic feet (Bcf) to about 200Bcf, with other prospects identified in neighbouring permits possibly yielding a further 150-200Bcf. The main nearby prospect identified was the Moana prospect in licence PEP 38485.

According to Tweedie, PEP 38485 operator Austrian firm OMV (33.34%), Origin Energy (33.33%) and Todd (33.33%) hoped to drill the Moana-1 wildcat either late this year or early next using the semi-submersible Ocean Patriot rig currently drilling the more southern Tui Area oil development wells for operator Australian Worldwide Exploration and its partners.

Tweedie said the Karewa project – using subsea completions, a floating buoy system and small tanker – was the third such project TCPL had worked on, using innovative technologies that enabled smaller discoveries to be developed and monetised.

A final investment decision for Karewa would be a first for New Zealand and could lead to other small offshore gas discoveries being developed economically, he said.

Todd had not yet discussed with Crown Minerals any terms and conditions associated with the granting of a mining licence for Karewa.

Tweedie also said Todd had recently chartered a small tanker, the Savannah, from Tanker Pacific for shipping export cargoes of blended Pohokura-Mangahewa condensate, and possibly Maui and Kapuni condensate, to Australian east coast refineries.

“When we proceed with Karewa we could also use such a vessel as the Savannah, as she is small enough to use Port Taranaki, New Plymouth, but large enough to accommodate the necessary CNG storage tanks onboard.”

Tweedie said the schedule for developing Karewa was uncertain, given that there seemed there would be plenty of gas around for the next few years, with some Pohokura gas already being piped to customers and the Kupe gas-condensate field due to come onstream from mid-2009.

“However, Karewa should be developed before any decisions are made about importing LNG,” said Tweedie, referring to New Zealand’s largest gas users, Contact Energy and Genesis Energy, and their plans to import liquefied natural gas should explorers fail to find enough domestic gas over the next few years.