Kupe gas starts flowing

The first gas to be extracted from the offshore Kupe field has been piped inland, 23 years after the field was discovered.

This afternoon the first gas and liquids was piped to a processing plant near Hawera, with full steady state production expected in the next few months.

The Kupe project is a joint venture deal involving Origin Energy, New Zealand Oil and Gas, Genesis Energy and Mitsui.

The gas field – which is expected to produce about 254 petajoules of natural gas, 1.1 million tonnes of LPG and 14.7 million barrels of light crude – was first discovered in 1986.

But for 20 years, the field was too uneconomical to develop due to cheap Maui gas and low oil prices, before the joint venture was established in 2006.

Paul Zealand, Origin executive general manager of upstream oil and gas, said Kupe would make a “significant contribution” over the next two decades to the country’s gas supply needs, initially providing 10-15% of the nation’s annual gas demand when at peak production.

“Once fully commissioned, Kupe is also expected to produce up to 90,000 tonnes per annum of LPG – more than 50% of the country’s demand - and it will significantly reduce the need to import LPG to meet New Zealand’s needs.”

NZOG chief executive David Salisbury said the company and its shareholders were finally about to be rewarded for their perseverance.

“Kupe will provide NZOG with long-term income from three revenue streams – gas, light oil and LPG. It gives us the solid base that provides the platform for further growth of the company”.