Solid Energy increases estimate for Taranaki coal seam gas

Tuesday 19th June 2012

Solid Energy, the state-owned coal miner being prepared for partial sale, has announced a more-than fourfold increase in its contingent resources of coal seam gas in the Taranaki after exploration results were assessed by the US consultancy.

The coal miner has 858,000 million cubic feet of gas, or about 900 petajoules, enough to run a 400MW combined cycle gas turbine such as the one at the Huntly power station for 45 years, it said in a statement. That’s up from its June 2010 estimate of 190 petajoules.

Solid Energy had its exploration data assessed by Dallas-based Netherland, Sewell and Associates (NSAI), it said. The state-owned company said it is “refocusing” its coal-seam gas development work in Taranaki after proving its technology at its Huntly coal seam gas demonstration plant.

“Based on NSAI’s knowledge of similar field developments, the best estimate (2C) resources have a reasonable chance of being commercial,” said Stephen Pearce, Solid Energy’s general manager for gas developments.

Solid Energy is seeking a five-year extension of its Taranaki permit to develop the project to the appraisal/discovery phase, it said. The company is also weighing options for its Huntly petroleum exploration permit.

“One option could be to put the site into care and maintenance, ready to quickly ramp up when gas prices justify this,” Pearce said.

“Given the soft short to medium-term gas price outlook and the expected cost of gas production in Huntly, further commercial scale-up of coal seam gas production is not justified at this time,” he said.

Reflecting the decision to focus on coal seam gas in Taranaki, Solid Energy will release a number of less prospective permits - Waiau (PEP 52359), Winton (PEP 53572) in the South Island, and Counties (PEP 52043) in the North Island, it said.

BusinessDesk.co.nz

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