GAS COMPANY SEEKS TO KEEP COSTS DOWN

Press, Volume CXIV, Issue 33527, 7 May 1974, Page 7

GAS COMPAN Y SEEKS TO KEEP COSTS DOWN

(

a staff reporter)

Gas users in Christchurch can shake their fists at the oil sheiks when the gas man starts tearing off a bigger bill than bef ore. Until a few years ago Christchurch gas supplies came solely from burning coal. The residue coke had a ready sale for home heating and the tar went into pavement construction. Then things started to go wrong. People went away ;from solid fuel for heating and road makers preferred ; bitumen to tar. The result was that the •Gas Company found itself unable to dispose of the by-' products after extracting the gas from coal. The company’s engineers, led by the general manager; and chief engineer (Mr E. F. Gorman), set about building, :a plant that would produce; jgas by burning a petroleum-! like spirit called virgin | naphtha. Three gallons of I naphtha would produce 1000; cu. ft. of gas which was I interchangeable with coall gas. Mr Gorman went overseas! [to study these plants and I when he got home he and , [his staff converted, an old! I water gas plant to the new! I technique. The plant worked splen-l didly — so much so. that the! company decided to build ! another with a production:

[capacity of 2.5 m cu. ft of; gas a day: two and a half times more than the firstl t jone. !c By making the plant 11 ‘themselves the staff saved: about $200,000 in foreign t 1 exchange. Il In just over two years the < 1 second unit produced about it 700 m cu. ft of gas. The company decided that its t [future development lay in theh • new production method. Itjt therefore set about building ;r a third plant. it LARGE SAVING i The brains behind that , work was Mr James Shaw. ‘ the company’s planning and f r project engineer. Gas was c produced only a couple of 1 weeks ago — again, at a huge saving in foreign ex- 1 change. c [ Having got that far, the c company thought it had all c [the problems solved. It [could produce gas from both ® • coal and naphtha and was . [able to meet the expanded * • demand throughout the .. [winter months without in-1 [creasing the price. ; But the oil sheiks soon j I spoilt these well-laid plans. | ■ In recent months the price of [I inaphtha, a derivative of oil, I [has leapt 300 per cent. ! The company can produce [I 14.5 m cu. ft of coal gas a day I I — enough to cope with off-[I peak demand — but in I [ winter the demand rises to; I [7m cu. ft and more. ■ While oil supplies now [I [appear to be reasonably! l • secure, costs will rise. Con-; • sumers will therefore have to; • pay more when the Trade | and Industries Department [ examines the changed cost • ■structure and approves .the! • new tariffs. Meanwhile an extensive; • search for alternating fuels; for the gas' industry is J I under way. SMALLER WORKS • Whereas the Kapuni [ i operation would have pro- [ • duced a satisfactory substii tute for naphtha, the amount • ■ 'available would probably be; I • enough only for the smaller:] I gas works at Gisborne, 1 1 • Napier and Hastings. To add to the national 1] • misfortunes, the 1968 Shand!] [Agreement for sale and ,pur-|] ; chase of Kapuni products 1 1 (gave preference to the Shell-!] B.P. Todd Consortium and .it; ] [is doubtful whether the fuel: ] would be available to the gas 1 1 industry at an economic; ] price. The Maui field, due to be | harnessed in 1978, allows the; | gas industry nothing, con- I fining its attention to pro-; I ducing cheap fuel for elec- ■ I tricity in the North Island. ; I

The Christchurch Gas Com- ■, pany can get no promises I when it asks what is to be! done with the liquid, petroleum gases from Maui. [ ; Mr Gorman believes that I < the natural gas consortium I has an interest in these pro- ! ; ducts—for which the de-1' mands are many. I, What, therefore, is to be ! the fate of the South Islander ! whose electricity is siphoned ! across Cook Strait and gets ! nothing from New Zealand’s [ only indigenous gas supplies at Kapuni and Maui. Mr Gorman says that butane and propane are both • extractable from natural gas j and may be liquified under. 1 pressure. Butane could be a substi- ■ tute for naphtha and propane 1 could be marketed in cylin- 1 ders. providing an excellent ] domestic fuel. ; Mr Gorman has already studied the importing liquid 1 petroleum gases to Lyttelton t from Melbourne. Such gases s now go from Melbourne to 1

•Japan for domestic and comImercial use. AUSTRALIAN SALE He recently tried without; success to interest the; [Government in the proposal. ; Last -February the Austra-1 [Han Prime Minister (Mr Whit-' I lam) sold 30,000 tons of; [surplus liquid petroleum gas; [as aid to the Phillipines—an ; amount which would have: gone a long way to relieving; the current South Island fuel! shortage. “It is heartening that some: investigation is being made: into the use of liquid petroleum gases as.a fuel for! public transport to replace! diesel oil,” said Mr Gorman.! “No doubt Christchurch • will be included in this exer-[ cise but butane should be! used for this, and the pro-! pane fraction should be used as a premium fuel. “Once the traffic in liquid: propane gas commences and! the facilities established, con-! siderable benefit should [ accrue over a wide field.” !