Production issues expected to keep power prices high

High power prices may persist for another month with full production from the Pohokura gas field not expected to resume before late November.

Output from the offshore field was reduced about three weeks ago after the venture discovered a shutdown valve on the project’s offshore production platform was not operating as designed.

The shutdown, coupled with falling hydro storage, pushed wholesale electricity prices to a 13-month high this week and has seen Genesis Energy ramp up production from its dual-fuel Rankine units at Huntly.

Operator Shell said a replacement valve had been tested and prepared for installation. The firm is also advancing work to replace part of the flexible pipeline that brings the field’s gas and condensate to shore.

“The current forecast is that Pohokura offshore production will not resume before late November when both valve and section replacement work is complete,” Shell said in an email.

“It is currently anticipated that offshore production will resume at unrestricted rates at this time.”

Pohokura is owned by Shell, OMV and Todd Energy. It typically delivers more than 70 PJ of gas annually from five offshore wells and three wells drilled from onshore. Output from the onshore wells is unaffected.

Earlier this year the venture halted production from the platform while suspected leaks in the pipeline were investigated.

Wholesale power prices averaged $290 a megawatt-hour at Otahuhu on Tuesday when modest wind generation compounded the impact of the reduced gas supply and de- clining hydro storage. That was up from about $102/MWh at the end of September.