Commission puts limits on sales from Pohokura gas field

A special authorisation allowing Shell and two other owners of the Pohokura gas field to jointly sell the gas has been revoked after it proved unnecessary.

The Pohokura field is owned and operated as a joint venture by Shell with 48 per cent, Austrian explorer OMV with 26 per cent and Todd with 26 per cent.

Production from the field, off the Taranaki coast, is due to start this year. Once in full production, Pohokura is expected to supply up to half this country's gas needs.

Commerce Commission chairwoman Paula Rebstock today said there had been a material change in circumstances since the commission granted authorisation to the three owners of the Pohokura field in September 2003.

At the time it was considered authorisation of the joint sale would avoid a one-year delay in using the gas, because the owners would not need to negotiate complex contractual arrangements necessary to sell the gas separately.

But the owners were ultimately unable to agree on arrangements to jointly sell the gas. Each owner separately sold their share, without the expected delays in production, Ms Rebstock said.

Separate selling had not resulted in delays, and there was now no public benefit in allowing the owners to have an anti-competitive arrangement to jointly sell the gas. As a result the commission had decided to revoke the authorisation.

Late last year Todd lost a High Court bid over who operates Pohokura.

It unsuccessfully challenged a decision by Shell and OMV to supplant Todd and Shell 50:50 venture Shell Todd Oil Services (STOS) as operator of the field.

- NZPA