Gas halt likely to lift power prices
Production from the offshore Pohokura gas field is to be cut for a third time in a year next month.
OMV, which last month became operator of the field from Shell, plans a range of interventions in the field’s offshore wells to “re-establish” the deliverability from those assets.
The work means that, for safety reasons, production from the five offshore wells will be stopped for about 30 days — 12 days in February and a further 18 days during the rest of the campaign.
“We anticipate that the onshore wells will be available to flow during this campaign, with no impact on onshore production levels,” said Gabriel Selischi, OMV’s senior vicepresident for Australasia.
Pohokura, now owned by OMV and Todd Energy, is the country’s biggest gas producer. The field, off the coast of Waitara, typically delivers more than 70 petajoules of gas annually from five offshore wells and three wells drilled from onshore.
OMV acquired Shell’s 48 per cent stake, and its 83.8 per cent interest in the Maui field, as part of a US$578 million purchase finalised over the Christmas-New Year break.
In recent years Pohokura has met about a third of the country’s gas demand.
The latest shutdown is likely to be bad news for power prices which soared in October when repair work at the field coincided with declining South Island lake levels and other generation outages.
Despite reduced demand, wholesale electricity prices have remained high so far this year due to a combination of low wind generation, planned maintenance shutdowns, declining snowpack on the South Island, and gas supply concerns.
Snow storage in Meridian Energy’s Waitaki catchment was about 49 per cent below average, the firm estimated on January 12.
Snowpack is important because it becomes water for hydro-electric generation when it melts.
Wholesale electricity cost an average $157.57/MWh in Auckland in the seven days ended Friday, according to Energy Link data.
Selischi said the exact duration and timing of the offshore shutdown periods will be subject to operational requirements and the weather.
Pohokura is the country’s biggest gas producer and in recent years has met around a third of total demand.