Gas reserves increase 7%, led by gains at Pohokura, Kapuni

Proven and probable remaining reserves stood at 2,116 Petajoules at January 1. Photo / 123RF

Development and appraisal work helped increase the country's natural gas and LPG reserves by about 7 per cent last year, according to government data.

Proven and probable remaining reserves stood at 2,116 Petajoules at January 1, up about 130 PJ from a year earlier.

The increases were driven by gains at OMV-operated Pohokura, the country's biggest gas producer, and Todd Energy's onshore Kapuni field, the Ministry of Business, Innovation and Employment said. Remaining reserves at the two fields increased by about 166 PJ to 714 PJ and by 57 PJ to 143 PJ respectively. New Zealand used about 168 PJ of gas last year.

Estimated remaining gas and LPG reserves in the ageing Maui field, the biggest discovered to date in New Zealand, fell by 41 PJ to 110 PJ. Reserves at Greymouth Petroleum's Turangi field fell by about 44 PJ to 277 PJ.

Reserves are a company's estimate of what can be produced commercially from a particular field. They can change based on exploration work, changes in a firm's understanding of a field, increases or decreases in prices, or adoption of new production techniques that boost recovery.

Firms try and keep developing fields to replace each year's production to maintain their business long-term. Countries try and maintain gas reserves to ensure industry has sufficient confidence in long-term energy supply.

MBIE says the latest reserves are equivalent to 11 years' demand, based on the average of the past four year's use. Output – and hence use – fell last year and earlier this year due to production problems, particularly at Pohokura but also at Maui.

Other data published today showed the country's coal-fired generation in the six months through March more than doubled from a year earlier as a result of gas shortages.

The Petroleum Exploration and Production Association says today's reserves data reinforce the need to maintain exploration and development. The government last year banned new offshore exploration.

Gas meets about 21 per cent of the country's energy needs and has about half the emissions of coal. It will also remain an important back-up generation fuel as the country develops more renewable generation, PEPANZ said.

"This means that new exploration and development is crucial," chief executive Cameron Madgwick said in a statement. "Potential work on the Maui field and around the South Island will be very important for New Zealand's energy future.

"A strong supply of New Zealand natural gas means we could reduce the amount of coal we burn, keep electricity prices down and avoid the need to import LNG from Australia."

Today's data shows gas producers have also increased their expectation of potential contingent gas resources by almost 440 PJ to 2,314 PJ.

Contingent resources are those estimated in known accumulations, but which have not been drilled or need other investment to warrant classification as either possible, probable or proven reserves.

The biggest increase was at Todd's onshore Mangahewa field where the contingent gas resource jumped to 964 PJ from 208 PJ a year earlier. Kapuni is the next largest contributor to contingent resources at 784 PJ.

Todd is actively drilling at Mangahewa and has plans for renewed development work at Kapuni in southern Taranaki.