LPG production expected to last several more years

1.00pm

Domestic LPG production could be extended for several more years following the recent agreement to develop remaining gas reserves in Maui, the Maui partners said today.

Last month, the Maui Mining Companies, the Crown and major gas users reached an agreement on the remaining reserves of the once giant gas field that would extend its life beyond 2007.

The new deal should also extend LPG production from Maui, LPG Association president, Owen Poole, said in a statement today.

"Obviously we are no longer dependent on Maui as New Zealand's major LPG producer. We now source much of our LPG from other domestic and international suppliers."

"We are hopeful the new arrangements will mean LPG reserves will continue to be available from Maui for several more years."

Mr Poole said it was too early to estimate the precise effect the new contract arrangements would have on Maui LPG production volumes.

"However, Maui is expected to produce LPG as long as it produces natural gas. There is now no reason why Maui should not continue to produce LPG well after 2007," Mr Poole said.

The New Zealand LPG market has grown 50 per cent in the last five years as demand has skyrocketed from household and small commercial users.

Major investment by major LPG wholesalers in reticulation projects has also fuelled growth.

During the 2003 winter, the industry imported about 12,000 tonnes of LPG from Australia.

Mr Poole said similar amounts are expected to be imported this winter, depending on demand.

Australia exports millions of tonnes of LPG each year, and it is only one of numerous sources, he said.

He said there was also good potential for LPG production from the new Kupe field. Enhancements to the Waihapa and Kapuni gasfields were also currently underway and that would further strengthen domestic supplies.

"With the Government's recent announcement about incentives for gas exploration, there is more reason to expect that new sources of LPG will be discovered, Mr Poole said.

- NZPA