NEW PLYMOUTH - Energy reforms may be bad news for domestic power users but gas producers are loving the competition among power generators.
Fletcher Challenge Energy yesterday reported that gas sales from the offshore Maui field had risen more than 50 per cent in the three months to March, compared with
the same period last year.
"This was driven by increased gas use in the power generation and methanol sectors," said Fletcher, which is the major Maui partner with a 68.75 per cent interest in New Zealand's largest energy resource.
Gas sales of 25.3 billion cubic feet (bcf) were 57 per cent up on the corresponding 1998 quarter.
Low hydro lake inflows and "competitive dynamics among generators" had resulted in more use of gas-fired power stations to meet electricity demand.
Condensate (light oil) production from Maui was also up, by 43 per cent to 1.7 million barrels.
Fletcher said the high gas use was likely to continue because hydro lake storage was below average for this time of year.
However, gas demand for methanol production was likely to drop significantly for the rest of the year.
This was a result of planned maintenance shutdowns at the Methanex Motunui complex this month and in November.
Low world methanol prices would also not help.
Total production from Fletcher's fields in Taranaki, Canada and Brunei was the equivalent of 11.56 million barrels of oil, an increase of 20.8 per cent on the same period last year.
Maui B oil production continued to decline, as expected, to 640,000 barrels, despite processing improvements.
Fletcher spent almost $16 million on its disappointing Ohanga-2 well inland from Onaero, which failed to flow any gas from the formerly promising Mangahewa field.
The company said the failure of that well, plus seismic survey results, meant the proven and probable gas reserves for the Mangahewa field were only about 101 bcf - down drastically on the 2500 bcf first hoped for.
Fletcher and its Maui partners, the Shell-Todd mining companies, also spent about $19 million on the unsuccessful Maui South-1 well this year. - NZPA
