Firms look forward to big spin-off from new oilfield

Local businesses are preparing for a financial windfall spawned by the development of a $980 million gas and oil field off the Taranaki coast.

Work on the Kupe gas and oil field will start in September and first production is scheduled for mid-2009.

It is expected to meet about 15 per cent of the country's current annual gas needs, and to provide light oil condensate (starting at 1.7 million barrels a year) and LPG (90,000 tonnes a year).

While few details are available on what it means for the local economy, the head of the Taranaki Chamber of Commerce has applauded the news.

Chairman John Rae said it was a no-brainer that the region was set to get a huge financial boost from the project.

"We don't yet know how much they are going to spend locally ... whatever happens this is going to have a massive spin-off for Hawera, Taranaki, and the whole country.

"Even if we don't get the big-ticket engineering jobs, someone is going to have to supply safety equipment, roading and building material, cleaning materials ... "

A consortium including New Zealand Oil and Gas, Origin Energy and state-owned Genesis Power is developing the field.

South Taranaki District Mayor Mary Bourke welcomed the announcement.

However, she urged caution in speculating about the long-term financial and employment gains for the region.

"It is significant for the region for a period but once the production station is developed it will tail off again."

She said the industry was highly specialised and mechanised so it was not a given that local workers would be employed.

"It is going to be pretty exciting for the engineering companies in the region, in terms of investment through local engineering firms, and in bringing people to the region with the required skill."

Ms Bourke expected to meet developers this week to get a better understanding of economic benefits for the region.

Kupe, New Zealand's largest undeveloped field, is estimated to hold 280 billion cubic feet of gas and almost 15 million barrels of light oil.

The project will use an unmanned production platform 30km off the Taranaki coast.