Big New Zealand gas field to go into production

Jun 29, 2006, 3:36 GMT

Wellington - A big offshore gas field found off the New Zealand coast 20 years ago but dubbed uneconomic at the time will go into commercial production now that rising energy prices have made it viable, it was announced on Thursday.

The Kupe field, off Taranaki province on the west coast of the North Island, is expected to provide 15 per cent of the country's natural gas consumption when it goes into full production in 2009.

It will also produce 1.7 million barrels of light oil condensate and 90,000 tons of liquefied petroleum gas (LPG) annually.

The developers are headed by Australia's Origin Energy, which has 50 per cent of the project and will operate the field, and the state-owned Genesis Energy (31 per cent) which will use much of the gas to generate power.

They said rising prices for LPG and other products had helped make the project viable.

Construction work on an offshore platform with up to six wells, an onshore production station and associated pipelines, which will cost nearly 1 billion New Zealand dollars (about 600 million US dollars), will start in September.

Finance Minister Michael Cullen said the development was a vital step in securing New Zealand's energy future.