Maui field yields extra gas

Good news for Contact Energy - there's more in the Maui gas field than anyone imagined.

Owners of the ageing field, Shell, Todd Energy and European company OMV, have announced they will offer more Maui gas for sale than first thought.

Contact has rights of first refusal on extra gas from the field, which has provided the backbone of the energy sector for the past few decades.

Confirmation of the extra gas will also provide a welcome breathing space for the energy sector and the Government, with concern growing about future fuel supplies for thermal power stations.

The rapid decline in gas from the Maui field - which is around 4000PJ in size - has prompted a flurry of exploration, but few successful discoveries. The Pohokura field, which has 750PJ of gas, is set to begin production later this year.

Contact and Genesis have spent the past two years drawing up plans for the eventual importation of liquefied natural gas, should local gas exploration be unsuccessful. They have stressed that any importing would be a last resort, but that planning needed to be done soon.

A decision to head down this track may have prompted extra efforts by the Maui owners to extract more gas from the field.

The size of any field like Maui can also depend on the price that its gas can be sold at. With prices low, it may not be economic to look for extra reserves. The price of gas to companies like Contact has risen dramatically in recent years, so the Maui field may have expanded accordingly.

Contact outgoing chief executive David Hunt said the company had always expected that more gas from the Maui field would become available.

He welcomed the development but pointed out that New Zealand's gas demand was for more than 100PJ a year.

He said that Contact would look closely at the opportunity to buy the additional gas.