Plans are in motion to fully develop New Zealand gas field

Australian oil and gas company Beach Energy is planning for the further development of its Kupe gas field, located offshore New Zealand, which will entail the drilling of up to two development wells. These plans have been greeted by Energy Resources Aotearoa due to its belief that more gas from Kupe would make an important contribution to the country’s energy mix.

The Kupe field is in the Taranaki Basin, offshore and to the south of Manaia and within New Zealand’s Exclusive Economic Zone (EEZ). It is operated by Beach Energy with Genesis Energy and New Zealand Oil & Gas as partners.

The Kupe project consists of three production wells as well as the Kupe normally unoccupied wellhead platform (Kupe WHP). Beach Energy is now proposing to drill up to two development wells at the existing Kupe WHP using a jack-up mobile offshore drilling unit (MODU).

Therefore, the company on 8 April 2022 lodged applications for a marine consent and a marine discharge consent to carry out activities associated with the development drilling of up to two development wells within the Kupe field.

This combined application includes activities which involve placement of structures on the seabed, removal of non-living natural material from the seabed or subsoil, disturbance of the seabed or subsoil, deposition of material on the seabed, causing of vibrations, causing of explosions, and the discharge of trace amounts of harmful substances to the sea via the deck drainage system of the MODU.

On 8 June, a public consultation opened on applications by Beach Energy related to the Kupe field. Submissions close on 21 July 2022.

The Minister for the Environment, David Parker, will appoint a board of inquiry to consider and decide the applications. The EPA’s role is to provide administrative support to the Board of Inquiry.

Phase 2 development of the Kupe field has always been in the field life plan. The primary objective of the Kupe Phase 2 is to fully develop the Kupe field to maximise production and extend the production plateau length of the field, thereby providing energy security to New Zealand into the future, Beach Energy explained.

According to Beach, gas produced from the Kupe field meets 10-15 per cent of New Zealand’s annual natural gas demand and 50 per cent of its LPG demand.

Project activities are expected to start in late 2022 to early 2023.

Energy Resources Aotearoa, formerly known as Petroleum Exploration and Production Association of New Zealand representing the upstream oil and gas sector in New Zealand, welcomed Beach Energy’s plan for Kupe, saying it would make an important contribution to New Zealand’s energy mix.

In a statement on Friday, Energy Resources Aotearoa Chief Executive, John Carnegie, said: “Beach Energy’s plan for potential development of the Kupe gas field is fantastic news. Not only would it be a welcome boost to New Zealand’s economy, it would also create more jobs and a greater supply of reliable, low-carbon natural gas.”

Carnegie added: “This announcement, combined with OMV’s ongoing investment in the Maui field and planned appraisal drilling of Toutouwai, will be welcome news for our major export businesses and households that depend upon an affordable and reliable supply of natural gas.

“Despite some regulatory challenges in the energy sector, one thing is clear: there is and will continue to be demand for low-emission natural gas to power our economy and our transition.

“Natural gas has a low carbon profile, is not reliant upon weather like renewables, and is easily transportable. It is the perfect fuel to power New Zealand’s low-carbon transition by supporting and underpinning renewable electricity.”

It is worth reminding that the New Zealand government in 2018 announced that no new offshore oil and gas exploration permits would be granted. However, existing permits are not affected by this change in policy.