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Maui deal may mean more LPG

Maui deal may mean more LPG

Domestic LPG production could be extended for several more years following the recent agreement to develop remaining gas reserves in Maui.

Last month, the Maui Mining Companies, the Crown and major gas users reached an agreement that will ensure the maximum economic recovery of gas from New Zealand’s largest gas field, and extend its life beyond 2007.

The new deal should also extend LPG production from Maui, LPG Association president, Owen Poole, said.

“Obviously we are no longer dependent on Maui as New Zealand’s major LPG producer. We now source much of our LPG from other domestic and international suppliers.

“But from a ‘Buy NZ’ perspective we would prefer to supply customers with as much domestically-produced LPG as we can.

“We are hopeful the new arrangements will mean LPG reserves will continue to be available from Maui for several more years.”

Mr Poole said it is too early to say precisely the effect the new contract arrangements will have on Maui LPG production volumes. However, Maui is expected to produce LPG as long as it produces natural gas.

“There is now no reason why Maui should not continue to produce LPG well after 2007,” Mr Poole said.

The New Zealand LPG market has grown 50 percent in the last five years as demand has skyrocketed from household and small commercial users. Major investment by the big LPG wholesalers in reticulation projects has also fuelled growth.

During the 2003 winter, the industry imported about 12,000 tonnes of LPG from Australia. Mr Poole said similar amounts are expected to be imported this winter, depending on demand.

“Australia exports millions of tonnes of LPG each year, and they are only one of numerous sources, so there is always going to be imported supplies available if New Zealand needs it.”

There is good potential for LPG production from the new Kupe field. Enhancements to the Waihapa and Kapuni gasfields are also currently underway. This will further strengthen domestic supplies of LPG.

And with the Government’s recent announcement about incentives for gas exploration, there is more reason to expect that new sources of LPG will be discovered, Mr Poole said.

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