Syn-gas signing ‘big step forward’

Press, 9 February 1982, Page 3

Syn-gas signing ‘big step forward’

PA Wellington The signing of the contract for the syn-gas plant in Taranaki will represent the “culmination of ma'ny, many months of hard work," said the Minister of Energy (Mr Birch) yesterday. Commenting on the announcement that the international oil giant, Mobil, will sign the contract for the Motonui plant on Friday, Mr Birch said that there had been “months and months of negotiation."

“There are still a few i’s to be dotted (before Friday) but I’m confident they can be sorted out.” he said.

The signing will mark the start of another of the Government’s growth strategy projects and Mr Birch said: “H’s a big one." “It is terribly important from New Zealand’s point of view. It will make a very big contribution to achieving self-sufficiency in petrol supplies.”

The final contract signing for the plant was originally expected last year, but was delayed in part because of the refusal of Mobil to sign before the outcome of the General Election was known. The American-based company will provide the highly sophisticated technology for turning natural gas into petrol, a process which has been attacked by opponents of the plant as wasteful.

The managing director of Mobil Oil New Zealand, Mr Phil Marriot, said yesterday, that construction would begin as soon as an appeal about the Planning Tribunal's decision on the plant's go-ahead was heard late this month. Construction would be completed by mid-1985, and production would begin late that year. Mr Marriot said the plant had been estimated in April, 1980, ,to cost 5767 million. Mobil was estimating the final cost by accounting for a 15 per cent average inflation rate until completion. That puts the final cost at about 51800 million. The appeal to the Planning Tribunal, which gave the project a virtually free bill of health, did not have Mobil worried, he said.

The appeal had been lodged by three Taranaki groups, North Taranaki Environmental Protection Association, the Ngatirahiri Hapu of the Atiawa tribe and representatives of the trustees of the Ngatirahiri Hapu. "The appeal has very little chance of success in as much as New Zealand Synthetic Fuels has taken great care to comply with the law. We should' be on site by midMarch.”

Speculation that recent delays were caused by wrangles over how shares

the Government has promised to allocate to other oil companies would be allocated, was wrong, Mr Marriot said.

“Mobil has just over 25 per cent (of the shareholding). That is settled." He said that left the Government just over 74 per cent of the shares, of which it had said it would keep 51 per cent. Negotiations over how the remaining 23 per cent of the shares would be allocated would take place after the Mobil-Government contracts had been signed, so they could not delay proceedings. Apart from administrative delays the signing was held in abeyance for several weeks during the election campaign.

Mobil asked that negotiations be adjourned until after the election result . was known because both the Labour Party and Social Credit had said they might not let the synthetic petrol plant go ahead on the same terms as the National Party was negotiating. The site of the plant in North Taranaki, 6km east of Waitara, covers 156 ha. The plant itself will cover 75ha in the centre of the area on flat, coastal terrace land.

When it begins production it is estimated that it will contribute one-third of New Zealand's petrol needs.