Power shares

[Ricky-bobby]

How long has Kupe got to run? Is there areas around it that have potential resources?.. in terms of shutting it down, isn’t it just capping the wells?.. they will provisions around this?.

[xafalcon]

How long has Kupe got to run? Is there areas around it that have potential resources?.. in terms of shutting it down, isn’t it just capping the wells?.. they will provisions around this?.

IMO Kupe will last for another decade, with output declining over this time. Output decline will be partially offset by decreasing demand through electrification of process heat and markedly increasing renewable electricity generation decreasing the need for thermal (gas and coal) electricity generation

I would not discount the possibility of LNG import in the future (mid 2030's onwards), which will require storage. Kupe could fit this requirement

[Waikaka]

IMO Kupe will last for another decade, with output declining over this time. Output decline will be partially offset by decreasing demand through electrification of process heat and markedly increasing renewable electricity generation decreasing the need for thermal (gas and coal) electricity generation

I would not discount the possibility of LNG import in the future (mid 2030's onwards), which will require storage. Kupe could fit this requirement

Kupe has an unmanned platform, not set up to allow gas reinjection in any meaningful way.

Theoretically it could last 10 years but even with development drilling happening now decline curve will kick in hard.



Kupe 1P remaining (at Jan 2023) is 177 Pj, 2P is 214.29 Pj, 3P is 275 Pj. Not that much upside to further development when average deliverability for 2022 was 59.6Tj.

As soon as Methanex leaves, gas market is ruined for further investment. Geology at that point wont matter as gas market wont allow FID on further work.

[xafalcon]

Your link is not working for me, could you please repost it

[Waikaka]

Your link is not working for me, could you please repost it

Nothing really interesting just a quick graph I made from MBIE declared reserves. Hopefully it works below.


Kupe_gas_forecast.JPG

Otherwise source data from here:

https://www.mbie.govt.nz/building-an...reserves-data/

Always fun to play around with to try and guess at what production level does someone start decommissioning their field. I suspect once the companies realise they will never be able to sell (due to ongoing liability conditions from Crown Minerals act) it will happen sooner than most people expect.

[xafalcon]

Thanks, it's working now

I thinks it's always good to listen to others comments, so I can learn more about a situation

Does methanex still run their original site and the synfuel front end? I visited both sites in the late 80's as a university student studying industrial chemical engineering. I think methanex was called petralgas back then. And the synfuel plant was making high quality branched chain synthetic petrol with ZSM5 zeolite catalyst

I tend to think gas production will be extended as much as possible as LNG is an expensive option for late-stage (10 years time) fossil fuel use

[Waikaka]

Thanks, it's working now

I thinks it's always good to listen to others comments, so I can learn more about a situation

Does methanex still run their original site and the synfuel front end? I visited both sites in the late 80's as a university student studying industrial chemical engineering. I think methanex was called petralgas back then. And the synfuel plant was making high quality branched chain synthetic petrol with ZSM5 zeolite catalyst

I tend to think gas production will be extended as much as possible as LNG is an expensive option for late-stage (10 years time) fossil fuel use

Methanex has its Waitara Valley permanently idled. Motunui swings between its trains swapping gas with Genesis in winter and running full bore over wet summers.

Petrochemical production underpins all investment in continued production. With out Methanex et al taking all the excess gas from the market, producing fields would need to have stop and start production seasonally. Which at their later life stage means big technical problems. Purchases on the spot out side those contracts, means industrial users pay unbelievable high prices (up to 25 $/GJ). Luckily the spot is a tiny percentage of the market.

Quarterly_gas_prices_NZ.JPG

Most likely the system runs until untidy failure and sky high gas prices start forcing out the last major customers. Too late to build an LNG facility to bridge the reserve gap and no way residential demand can justify the infrastructure needed. If one of the big producers drops out of the market and there is no industrial petrochemical users to swap gas, all cards off the table. Just look at the field declines despite the recent development drilling at Maui, onshore and interventions at Pohokura. From July 2022 to July 2023 Pohokura production dropped from ~110 TJ to under 80 TJ. That is in just one year!

Gas_production_by_field.JPG

Producers will eek out their last reserves and if behind close doors Methanex is still willing to sign long contracts, should give us a little time. Going to be interesting.