Westech to drill for methane near Auckland

Energy Corporation of America (ECA) says it will begin a coal seam gas drilling campaign south of Auckland early next year.

Westech New Zealand, a wholly-owned subsidiary of US-based ECA, will be drilling the six new wells on petroleum exploration sites south of Hamilton, and between Hamilton and Auckland.

ECA owns 100 per cent of the coal seam gas licenses near Auckland, it said in a statement.

"ECA and our Westech subsidiary have had success with the exploration and production in New Zealand," said Clark Clement, vice president western operations, ECA. "We're pleased to continue that success with this new North Island campaign."

Geologists have said that New Zealand's significant coal reserves and looming shortage of natural gas is ideally placed to take advantage of the relatively new technology of extracting methane gas from coal seams.

The gas could be distributed through the same pipeline networks that carry natural gas from Taranaki.

Gas pumped from the Waikato or near Auckland would be closer to potential heavy industrial users such as Fonterra or Auckland factories.

Coal seam gas first attracted attention in the early 1990s in Otago and Southland, and reservoirs were found there in 1999 -- strategically located close to urban and industrial sites.

The coal seam gas varies with different coal types, but is typically 90 per cent methane with some carbon dioxide, hydrogen and heavier hydrocarbons.

Methane is 21 times more effective than carbon dioxide in contributing to global warming.

There has been debate in the petroleum industry over the extent to which gas miners should be charged a carbon tax on gas vented to the atmosphere.

ECA's permits on the west coast of New Zealand contain approximately 354,278ha. The company has also been exploring in Taranaki and made discoveries in Hawke's Bay.

ECA operates 5000 gas and oil wells in the United States -- primarily in the Appalachian Basin and Gulf Coast regions -- and three in New Zealand.

- NZPA