Kupe JV Decides on New Gas Production Station

Origin Energy Resources (Kupe) Limited, as operator of the Kupe Gas Project, announced on behalf of the joint venture that it has elected to proceed with the design of a new onshore production station to process gas from the proposed offshore Kupe development, rather than toll the gas through existing onshore facilities.

The option of constructing new facilities was compared with proposals to toll the gas through existing onshore facilities owned by third parties, including NGC's Kapuni production station, which would have required modifications and substantial additions. The Kupe Joint Venture has completed a thorough evaluation of all technical and commercial factors including costs and project risks for both alternatives and has determined that on balance, the most appropriate way forward is a new production station.

The Kupe Joint Venture proposes to extract natural gas, LPG and light oil from the Kupe field situated approximately 30km offshore south of New Zealand's Taranaki Peninsula, in Petroleum Mining Licence 38146 (PML 38146).

The proposed site for the new onshore production station is west of Hawera at the southern end of Inaha Road. The production station will be designed to process at least 70 TJ/d of natural gas.

The Kupe Joint Venture's application for resource consents will be considered by the South Taranaki District Council at a hearing on April 4 2005 and by the Taranaki Regional Council in mid April 2005.

Front end engineering and design (FEED) work associated with the onshore and offshore elements are now well advanced and the Joint Venture is scheduled to make its formal project sanction decision in the fourth quarter of 2005. Subject to an affirmative decision to proceed at that time and appropriate approvals being achieved, construction of a new production station is expected to take approximately two years, with first gas, oil and LPG deliveries in the second half of 2007.

Participants are:
Origin Energy Resources (Kupe) Limited 50% (Operator)
Genesis Energy 31%
New Zealand Oil & Gas Limited 15%
Mitsui E&P (New Zealand) Limited 4%