Maui use ‘electricity only'

Press, Volume CXII, Issue 33065, 4 November 1972, Page 1

Maui use ‘electricity only'

(New Zealand Press Association) NEW PLYMOUTH, November 3. The use of the product from the Maui offshore gas and condensate field for a petrochemical industry was “just not on, economically, at this stage,” a spokesman for the Shell-BP-Todd oil consortium said today.

Nor was it economically feasible yet to use the product to get liquefied petroleum gas suitable for export.

The spokesman was commenting on the announcement by the Prime Minister (Mr Marshall) in New Plymouth on Thursday night of a new basis of negotiation for developing the field. Mr Marshall said that the Government and the consortium had agreed to negotiate on the basis of a 5050 development, with the Government and the consortium equally developing the field, bringing the gas and condensate ashore and marketing the fuel. He suggested that there might be “other purposes,” apart from power generation, for the Maui fuel. It was clear from the consortium’s spokesman that if negotiations were concluded successfully — industry sources predict by the New Year —then Maui gas would be used exclusively for power generation. This is because of the huge reserves still untapped in the Kapuni field. Although there were still points to negotiate before final agreement could be announced, the consortium welcomed the Prime Minister’s statement, said the spokesman. A settlement in the negotiations was now reasonably certain, Mr Marshall said, when interviewed today. The joint development suggestion had been introduced into the negotiations by the Government several months ago, he said.

‘POLITICAL REASONS’ The statement apparently caught oil company executives in Wellington by surprise. All they would say today was that discussions were continuing, so no comment would be available.

But industry sources in New Plymouth said today that the Prime Minister’s statement, coupled with the consortium’s comments, was the most optimistic reaction yet on the Maui negotiations, and while there were probably political reasons for making the statements now, it seemed that the negotiations were proceeding well.

The consortium's spokesman said that he could not say yet where the gas and condensate would be brought ashore, or what effects the Maui agreement would have on Kapuni.

Nor would he give details of the sequence of development, the number of production platforms to be used on the field or whether the consortium would be exploring other oil-bearing structures around the Maui field.

He agreed that one of the main obstacles to agreement on the original basis — the price paid to the consortium for the gas—was that there would have been a limited consumer market relative to the potential and development costs of the field. EFFECT ON HUNTLY

Mr Marshall confirmed today that a successful early conclusion to the Maui negotiations might mean that the proposed Huntly power station would bum gas rather than coal. The station was being designed to take either fuel. A final decision on Huntly would be made after consideration of an environmental report now being prepared, he said. The Maui field, which was discovered three years ago, has been said to be one of the 15 biggest gas fields so far discovered outside Russia. Maui I was drilled in 1969 and three others were subsequently drilled in the South Taranaki Bight. All four wells were successful, although it was said at the time that Maui IV was too far from land to be economic.