Bids sought to revive Kahili gasfield

Taranaki’s Kahili gasfield, once choked with water, may be revived as government seeks bids

Feb. 10 (BusinessWire) - The New Zealand government is seeking to revive interest in the gas-bearing onshore Taranaki gas field, Kahili, five years after initial production was shut down when water entered the reservoir.

Energy Minister Gerry Brownlee announced bids will be accepted until May 3 for the 5.99 square kilometre block offer, includes the Kahili-1B well, which has been closed but not filled in. Associated production facilities remain on-site, lowering the cost of resuming production, should the opportunity be there, Brownlee says.

The Kahili resource was discovered in 2002, and Austral Pacific granted a mining permit in 2004 after reaching a purchase agreement with NGC. Production stopped shortly after when the well unexpectedly filled with water, but significant volumes of gas could remain in the complex sandstone reservoir.

There is a high likelihood of more hydrocarbons being found in surrounding areas, the Crown Minerals section of the Ministry of Economic Development believes.

"The area includes the gas facility and pipeline at Kahili wellhead, which makes the gas volumes required for commercial viability of the field very low,” Brownlee said. "The Government believes the potential of the field can be realised and the tender is being opened today to see what commercial interest there is.”

The field also produced light oil, but flow rates plummeted within six months of starting production, most probably because of high water flows into the small Kahili-B reservoir.

(BusinessWire)