NZ's Kupe Gas Project Now Fully Operational

Today's official opening of the Kupe Gas Project by the New Zealand Prime Minister, John Key, demonstrates the important role of the project in helping to secure New Zealand's gas supply needs.

Origin and its joint venture partners Genesis Energy, New Zealand Oil and Gas (NZOG), and Mitsui E&P Australia have invested over NZ$1.3 billion during four years developing the Kupe Gas Project.

Kupe Gas Project is now fully operational and is one of New Zealand's most important new infrastructure developments, supplying natural gas to the country's gas transmission system, LPG for national distribution, and light crude oil (condensate) for export to refineries in Australasia and the South Pacific.

Speaking on behalf of the Kupe Gas Project joint venture at the opening in Taranaki today, as operator, Origin Energy's Managing Director, Mr Grant King, said the project fills an important gap in New Zealand's energy supply.

"At peak, it is expected that Kupe Gas Project will produce 10 to 15 percent of New Zealand's current annual gas demand and 50 percent of its LPG current demand. Everyone involved in the project should feel proud of the way it has been executed, in particular the commitment to safety, contribution to the national and local economy and excellent support it has received from all the local community," King said.

"At the height of construction, approximately 1,000 people worked on the production station site, providing a significant boost to the local economy. In constructing this facility, more than six million hours of labour was expended while maintaining a very strong record of safety.

"Kupe Gas Project has also created significant economic benefits through the use of operators in the New Zealand supply chain. The project awarded New Zealand companies nearly three quarters of the overall project capital expenditure that the nation had the capacity to tender for. This realized spend in New Zealand of approximately NZ$600 million, or almost half of the project's total capital expenditure.

"The project will continue to deliver significant economic benefits to Taranaki and New Zealand -- through employment, equipment procurement, associated services such as accommodation and transport, export income and Crown royalties.

The Kupe Gas Project is made up of an unmanned offshore platform with three production wells, a 30km raw gas pipeline running from the platform to the shore, an onshore production station near Hawera, light crude storage and export facilities near Port Taranaki in New Plymouth.

The project has been a world-wide effort, involving employees and contractors in Taranaki, Auckland, Wellington and Picton, and others in Aberdeen, Adelaide, Bangkok, Brisbane, Kuala Lumpur, Melbourne, Paris, Perth, and Sydney.

NZOG Chairman Tony Radford said the Kupe field was found by the company when it drilled the first discovery well in 1986.

"This well was followed up by NZOG and its then partners with the drilling of four more wells, all of which discovered oil and gas and together formed the basis for delineation of field reserves and expected performance," Radford said.

"The fact that NZOG drilled the exploration well which made the Kupe discovery, then invested substantial funds into appraisal drilling of the field following that discovery, and that the company continued to foster development of this petroleum resource, including through investment of another $200 million as a 15% partner in the development, are an excellent demonstration of the long term commitment which NZOG has to the petroleum exploration and production business within New Zealand."

Over the life of the project, Kupe will produce approximately:

  • 254 petajoules of natural gas
  • 1.1 million tonnes of LPG
  • 14.7 million barrels of light crude oil