Joint venture drills for trapped methane

Coal has long been king in Huntly, but soon the town may also be celebrated for providing the solution to New Zealand's looming natural gas shortage.

State-owned coal producer Solid Energy is joining forces with United States oil and gas company Resource Development Technology to find and develop methane gas resources in deep coal seams in north Huntly and the northern areas of the Rotowaro coalfield.

Coal bed methane is largely indistinguishable from natural gas, which is in rapidly declining supply in New Zealand as the Maui gas field runs down.

The two entities have formed a joint venture company, Coal Bed Methane, to assess the reserves.

If viable, they will extract trapped methane gas from low rank coal seams which are up to 1000m deep, under a petroleum exploration permit granted to Resource Development Technology in 2002.

Coal bed methane can be used for industrial energy, electricity generation and be injected into gas network systems.

Initial work has indicated Huntly's methane resources could be equivalent to a gas field with up to 300PJ (peta joules), 70 per cent of which could be extracted over 20 years. By comparison, the Pohokura gas field is estimated at 600 to 800PJ and the Kupe field at 300PJ.

Huntly Power Station, which generates electricity using coal and gas, uses around 60PJ of fuel a year.

The joint venture will start with four to five exploration holes early next year. A pilot extraction programme could start in 2006.

- NZPA