Oil and gas

With high oil prices and sustainability concerns, the question is whether our dependence on oil will continue or whether substitute technologies and modes of transport will be adopted. The Energy Centre is currently engaged in the following project.

New Zealand gas market

Gas supply in New Zealand used to be dominated by the Maui field and its original contract. Since the renegotiation of Maui's contracts, and with the coming on-line of new, smaller fields, the New Zealand gas market has changed, with considerable uncertainty about reserves, production, contract conditions and prices.

Government policy is focused on stimulating further E&P, but the supply side remains dominated by a few major players. A proposed gas wholesale market as a national platform for trading "unders and overs" gas has been postponed again. Worries about this are reflected in the fact that most major gas users have chosen to "invest or partner" in the upstream gas supply side, to try and secure their future gas supply at acceptable prices. The importation of LNG is still an option, but unlikely to eventuate within the coming decade. Gas transmission is not a major problem yet, but might become so in the future if planned large projects north of Rotowaro/Huntly are to eventuate.

At present no clear decision and pricing mechanism exists for gas transmission expansion (as is the case with the GIT for electricity transmission expansion). Information on the New Zealand gas market is scarce, further hampering decision-making, especially for industrial gas users and electricity generation. An initial "stock-take" of the New Zealand gas market will be followed by a further research proposal concentrating on the drivers for gas demand by large industrial users.

Research team: Bart van Campen, Robert Kirkpatrick

The image of the Taranaki oil rig on the previous page is copyright to photographer Chris Sisarich (chris@chrissisarich.com).