Kupe Gas Project Status Update

Origin Energy as operator on behalf of the Joint Venture consisting of Origin Energy Resources (Kupe) Ltd, Genesis Energy, New Zealand Oil & Gas Limited and Mitsui E&P (New Zealand) Ltd announced that it has completed an Assessment of Environmental Effects (AEE) as part of seeking resource consents for the Kupe Gas Project.

The Kupe Gas Project proposes to extract natural gas and light oil from the gas field situated approximately 30km offshore southwest of Hawera, in Petroleum Mining License 38146.

The AEE is to be lodged this week with the South Taranaki District Council and the Taranaki Regional Council for review, and will form the core regulatory approvals document to support the Resource Consent Process. Developed after nearly four months of close consultation with government agencies, local councils, and the community, the AEE presents a summary of relevant project information, legislation and the findings of specialist environmental investigations.

"Our team has already held extensive discussions with the community to ensure that we get this proposal right and we will continue to provide forums to ensure public involvement in the council's decision making process," said General Manager Geoff Wearne. "Details such as the impact of the project on marine ecology, air quality and archaeology are described in the AEE and demonstrate that the adverse effects of the project proceeding are minimal."

As outlined in the AEE, the proposed development includes installation and operation of new gas production wells, and an offshore platform with a pipeline to shore. A Horizontal Directional Drilling program will connect the offshore components with the onshore raw gas pipeline. The pipeline will proceed to a new onshore Production Station west of Hawera where the raw gas will be processed. North of the Production Station, the pipeline will continue and connect to the existing gas network at the Kapuni Gas Treatment Plant. The light oil from the gas production process will either be delivered by road tanker or an underground pipeline to the Omata Tank Farm at New Plymouth.

"As an alternative to constructing a new gas production facility, we are currently negotiating with NGC to use the Kapuni Gas Treatment Plant to process the raw gas and light oil. If this facility is suitable and commercially available then a new gas production station will not be required for the project and separate documentation will be prepared and submitted for the proposed expansion of the Kapuni Gas Treatment Plant," said Mr Wearne.

Origin Energy is currently in the process of pre-qualifying suitable contractors for the construction of the offshore elements of the project. "There will be three offshore contracts; platform fabrication, platform installation and offshore pipeline installation. We are expecting that those pre-qualified companies will be invited in January 2005 to submit full tender proposals," said Mr. Wearne.

The Kupe Gas Project will make a significant contribution towards meeting New Zealand's gas demand, providing approximately 230 petajoules of natural gas and 16 million barrels of light oil over a production life of between 15 and 20 years.

Mr. Wearne said that the Joint Venture had received considerable public support for the project and the benefits it can bring to the local region and the New Zealand energy market. "If approved, the development is expected to be online by 2007 with both the construction and operational phases of the Project involving the creation of jobs and use of local services."

Participants are Origin Energy as operator with 50%; Genesis Energy with 31%; New Zealand Oil & Gas Limited with 15% and Mitusi with 4%.