Output from the country's biggest gas field has fallen about 15 per cent the past six weeks and operator OMV is yet to establish why.
The offshore Pohokura field, the subject of a series of maintenance shuts during the past two years, delivered about 172 terajoules of gas yesterday, according to Gas Industry Company data. That is down from a recent high of about 205 terajoules in mid-May.
In a notice to customers and the broader industry on Friday, OMV said production rates from the field had declined faster than expected after maintenance work on several wells earlier in the year.
"The causes and possible remedies are currently being investigated," the firm said. This afternoon, the company announced an unplanned outage and said it was preparing to resume production. It expected to lose about 40 TJ of production.
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Pohokura, off the Taranaki coast, contributed more than a third of the national supply last year. Reduced gas supplies – due to a series of planned and unplanned shutdowns at Pohokura and other fields in the past 18 months – kept average wholesale electricity prices above $100 a megawatt-hour for most of 2019.
Wholesale power prices have climbed again in recent weeks amid cold weather as North Island hydro storage remains low. Meridian Energy is holding back water in its dams on the South Island where storage is also declining. National storage was 22 per cent below average yesterday, according to NZX Energy data.
John Kidd, director at energy research house Enerlytica, said the best-case scenario at Pohokura is that the production decline is only temporary until the company commissions new compression equipment for the field, expected in August.
In the meantime, he said the reduced supply will add to uncertainty in a generation market already wary about winter hydro supplies.
"If the decline is, however, concluded to be of longer-term reservoir performance dimensions then forward-looking estimates of reserves and production could be impacted."
OMV is nearing completion of a two-year project to increase compression capacity at the field. The work is making good progress and will be completed in the third quarter, the company said Friday.