Government close to far-reaching decision on Maui

Press, 13 July 1979, Page 1

Government close to far-reaching decision on Maui

PA Welling lon Far-reaching decisions on development of the Maui gas field will be made by the Government after it receives a feasibility study from the Liquid Fuels Trust Board next month.

The Minister of Energy (Mr Birch) speaking during the Budget debate in Parliament last evening, said there were basically only four feasible options in the development of the field. These were: — The production of methanol as a 15 per cent blend, or the production of methanol as a synthetic gasoline using the Mobil process. — To use methanol as a base fuel or export it to a “very firm” international market as chemical methanol. — Adopt the Shell proposal for exporting liquid natural gas. — Adopt the Petrocorp proposal to produce synthetic crude. “These options, or a

combination of these options, hold the key to full use of the Maui field,” Mr Birch said. But the public must understand that once the decision was made there would be a delay of between four and eight years to production, depending on which option was accepted. “All of these options are on the very frontier of technology,” he said. Mr Birch also announced that the Government was close to deciding whether it would convert its fleet of vehicles to compressed natural gas. The Post Office had 2500 vehicles suitable for conversion at a total cost of about $4.6 million. Mr Birch said trials had shown C.N.G. was prob-

ably the most economic use of natural fuels near gas pipelines. The decision to convert the fleet would be made in the next day or two. The Government’s energy pricing policy had been widely misunderstood, Mr Birch said. The Government had never intended to relate the price of an indigenous energy to the price of imported oil. He gave an assurance that the price of indigenous fuels would be kept “significantly below” that of imported oil. Big export companies would be able to negotiate prices for bulk supply. Mr Birch said that in real terms' the price of electricity was now significantly below what’ it was in the 19605. However, a

rise could be expected in the price of Maui gas to cover the costs of piping it inland. The Mines Division was making a feasibility study of the most economic deposits of lignite in Southland, he said. Once this report had been completed, he intended to visit Southland to discuss development of the lignite reserves with local authorities and landowners. The Government would then invite international companies to put forward proposals for developing these reserves. Mr Birch said he had good reason to believe there would be keen interest in overseas investment in Southland.