The first of three additional gas injection wells has begun drilling at Contact Energy's Ahuroa underground natural gas storage facility near Stratford, Contact said.
The wells when completed will enable sustained gas injection and extraction into the field. Contact managing director David Baldwin said the start of drilling marked the next phase of the $250 million Ahuroa development.
The conversion of the depleted Ahuroa gas field into the country's first underground natural gas storage facility is being undertaken by Contact with drilling, design and operations managed by Origin Energy.
Since a new compressor was installed and commissioned on the site in early October, Contact has been injecting gas into the field at the rate of around 40 terajoules per day.
When operational in 2010, the Ahuroa gas storage facility will enable Contact to take natural gas during periods when the market doesn't require it and store it underground for use during peak gas and electricity demand periods.
The project will restore gas supply flexibility for Contact, enabling the company to shut down its gas-fired power stations when they are not required without being penalised by take or pay gas supply contracts.
The Ahuroa gas storage facility will also provide flexible gas supplies for the company's $250 million, 200 megawatt gas-fired peaking power station which is under construction at Stratford and expected to be commissioned in mid-2010.
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