NGC to Acquire Kahili Gas

Indo-Pacific Energy and NGC Holdings have announced arrangements regarding the development of the onshore Taranaki Kahili gas-condensate field in onshore Taranaki permit PEP 38736.

NGC said it would construct, own and operate pre-treatment facilities and an export pipeline to deliver the gas to the company's existing Taranaki infrastructure, including, in the future, its Kapuni gas treatment plant.

The field's sole producing well, Kahili-1B, was expected to produce approximately 5 Petajoules of gas and gas recovery could increase if the Kahili partners decided to drill additional wells in the future, NGC said.

The $NZ8 million project was expected to start once contract terms had been finalized, with the whole project being commissioned next March.

Indo-Pacific Energy said an 11 km export pipeline would be run from the Kahili-1B well site to NGC's gas pipeline between the Kapuni plant and the more northern Methanex methanol plants. At the NGC pipeline, a pre-treatment facility would be built to separate and store condensate before injection of the untreated Kahili gas into the pipeline.

Indo-Pacific said it would remain responsible for the operation of the well, while NGC would purchase the gas and LPGs, and the Kahili partners would truck the condensates to the Omata tank farm near New Plymouth, for export and sale.

Indo-Pacific is the permit operator and holds a total 45% interest in PEP 38736 and the Kahili field, with Tap (New Zealand) Pty Ltd holding 30% and IRM (Malaysia) Inc 25%.

Earlier this year NGC secured a 10-year first right of negotiation option for future gas discovered by Indo-Pacific, in return for a $NZ2 million prepayment.