ENERGY HUNT; Oops! Offshore gas is 'on,' but its uses are still far off
To date, New Zealand's giant offshore natural gas discovery, the Maui field, has been a huge white elephant. Costing about $1 billion to open up, the field -- about 22 miles west of the North Island -- has operated at only about 30 percent of capacity for the past year. The reason: Projects that will use the gas to make fertilizer, gasoline, and aluminum are still not complete.
This mistiming has caused the government, which owns 50 percent of the project, to fulfill an agreemnt with its fellow owners -- Shell, British Petroleum, and a local company, Todd Petroleum -- to pay the full price for maximum production, even though the field now yields far below its rated capacity of 9 million cubic meters (315 million cubic feet) a day.
But this "take or pay" agreement does not apply to the field's gas condensate , a light fluid fuel. According to R. J. Hogg, general manager of the government's petroleum Corporation of New Zealand (Petrocorp), the field produced 90,000 barrels of oil in May -- about one-third capacity. Even though the liquids were allowed to be sold at world prices, the low yield worries the oil companies.
"The economic time horizon of the platform has been moved out," Mr. Hogg says.
The gas is now used by a power generating station in New Plymouth, and a small amount is made into compressed natural gas for automobile use. New Zealand Forest Products expects to use some soon at one of its mills.
Much of the gas, however, will probably continue to stay underground until the first of the major projects, an ammonia/urea fertilizer plant, comes on stream next year. This plant, at Kapuni on the North Island, is expected to produce 155,000 tons of fertilizer a year -- more than enough for local demand -- while the rest will be exported.
Use of the gas is expected to speed up in 1983 when Comalco, an Australian aluminum company, will expand its Tiwai Point smelter by adding a third potline. At the same time, a 1,200-ton-a-day methanol plant is to be built by Petrocorp and a Canadian company, Alberta Gas & Chemicals.
The field's ethane gas will also be exported, but Energy Minister William Birch says not enough money or skilled workers are available to build a plant to convert the ethane into ethylene and eventually plastics.