The Kupe gas and oil field in the offshore Taranaki Basin has more than 10 years of production life remaining.
This was pointed out in an investor presentation by 46% owner Genesis Energy Ltd (NZX & ASX: GNE) which said the field, developed on three production wells, has a nameplate plant capacity of up to 27 TJ per day “with excellent reliability.”
This project was expected to generate 10% of free cash flow for Australian partner and operator Beach Energy Ltd (ASX: BPT) over the next five years. Beach purchased Origin Energy subsidiary Lattice Energy that contained the Kupe equity.
Genesis said key variables for the project were customer demand across all products produced (and reports on gas demand show a major increase in demand in NZ) and the requirement to drill a further well.
The presentation brought home some home truths about reliability on existing energy requirements.
Genesis said NZ’s hydro storage was too small to manage droughts. With Norway even four times the relative storage and with European Union interconnectors that country was still only achieving 98% renewables.
By comparison NZ has two months hydro storage at 85% renewables.
Deep energy storage is a big challenge for the country. There were only limited options available to store 3,000 GWh of energy. This could be five more hydro schemes the size of Lake Taupo, 140 Tesla Powerwalls per household (which would cost $2 million per house); 10 M 45 kg LPG bottles (plus some sort of generator); or 80% of the potential of Genesis’ Huntly coal stockpile – about 1.4 M tonnes.
Genesis told investors it was covering its emissions through hedging through to 2025, and the company was investigating longer term hedging options.
The company said its technology platform is built for product innovation, and this has seen billing migration completed with zero downtime; having the greatest range of Azure cloud services in NZ; and an integrated technology business unit into the rest of the company business.