New Kahili field poised to turn on taps

By CHRIS DANIELS energy writer

Natural gas will soon be flowing from the Kahili field in Taranaki after NGC on Friday gained full resource consent to build production facilities at the site.

NGC will build a separation plant and about 12km of pipes. This facility will process raw gas coming from the Kahili well and pipe it into the NGC network.

The company yesterday also said it would spend $1 million buying a 4km LPG network in Wanaka. NGC will build a bulk LPG storage facility to supply the system.

Demand for LPG had doubled in recent years, said chief executive Phil James. Many of Wanaka's commercial LPG customers had their gas delivered in 45kg cylinders, but would soon be able to get it via the new network of pipes.

NGC says its new Kahili facilities should cost about $8 million.

The field, discovered in November 2002 by Indo Pacific (now Austral Pacific), is expected to produce about 5 petajoules (PJ) of gas, but this could increase if more wells are drilled.

One petajoule is equivalent to 25 million litres of oil.

By contrast, the offshore Pohokura field, which has yet to come into production, is thought to contain 750 PJs.

Kahili, which is operated by Austral Pacific, should start producing gas at the end of June.

Austral Pacific is listed on the TSX Venture Exchange, part of the Toronto Stock Exchange, and the NZ exchange.

It has just announced its financial results for the year to December 31, saying net petroleum income was US$52,110 ($81,200), down from US$782,422 the year before. This was mainly due to its Goldie-1 well being shut because of a legal dispute with Greymouth Petroleum.