Offshore gas supply expected to be back to normal soon after four month pipeline repair

Friday, 29 June 2018

A Taranaki offshore gas production facility which produced almost half of the country's gas is expected to commence normal supply soon after a leak was discovered in March.

Shell Taranaki general manger Rob Jager said repairs to the Pohokuraoffshore pipeline, near Motunui, North Taranaki, had undergone a complex and thorough investigation involving removal of gas and gas condensate from the line.

The pipeline was pumped under extreme pressures, twice the normal operating pressure of the line, to pass testing, he said.

'We are in the final stage of planning for restart which we anticipate to be in July.

'We have never been prepared to restart until we are confident it is safe to do so.'

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Jager said the testing had resulted in a good outcome but there were a number of remaining activities that required completion by joint venture operators, Shell Taranaki, and acceptance from the certification inspection body before re-starting offshore production.

Offshore production is due to restart once acceptance by the inspection body and a certificate of fitness is completed.

The 10.8km pipeline carried up to 13 million cubic metres a day of gas condensate from offshore to the Pohokura production station to be processed into natural gas for distribution to the North Island gas network.

The condensate was piped to storage tanks near New Plymouth and shipped to refineries.

Jager said in April routine inspection of the pipeline using remote operated vehicle (ROV) found bubbling gas from the pipeline running between the offshore Pohokura Platform B and the on shore Pohokura pipeline.

The loss of offshore gas supply has allegedly cost methanol producer, and main customer, Methanex up to $2million a day, an industry commentator said.

The Methanex plant at Motunui had recently undergone an extensive six week maintenance shutdown.

The company produced 2.4m tonnes of methanol annually and exported 95 per cent overseas, mainly to Asia and Pacific regions. 

In 2017 the company generated $634m of regional GDP, and $834 million of national GDP.

Woodward Partners energy analyst John Kidd said the pipeline outage was on a scale equal to the gas pipeline break in 2011.

'The simple current reality is that New Zealand's largest gas field, which normally meets 35-to-40 per cent of gas market demand, has a suffered a major unscheduled part-outage with no external visibility as to when a return to normal service can be expected,' Kidd told the New Zealand Herald.

Kidd said the situation was 'materially under appreciated for its significance'.

During the 2011 pipeline break North Island gas users, including industries, electricity generators, business and household consumers, were short rations while it was repaired, he said.

Taranaki Regional Council had investigated a 'minor gas discharge' and been fully briefed by Shell Taranaki, TRC resource management director Fred McLay said.

The pipeline has not been used since the discharge was identified in April and no environmental affects had been seen.