Underground gas storage gets go-ahead

An Origin/Contact Energy consortium has been granted permission to proceed to fully commissioning the Ahuroa underground gas storage facility near Stratford in Taranaki, Energy and Resources Minister Gerry Brownlee said today.

“A permit under the Crown Minerals Act has been granted that will allow the Ahuroa Gas Storage Project to be developed into a fully-functioning underground gas storage facility for the purposes of storing and supplying gas for electricity generation,” said Mr Brownlee.

“This is an exciting development, which illustrates the growing maturity of the New Zealand gas market.

“Not only will this be the first commercial underground gas storage operation in New Zealand, but this project will allow Contact to better manage the use and supply of gas during peak period and low periods.

“The Ahuroa gas storage facility will also supply Contact’s $250 million, 200 megawatt gas-fired peaking power station being constructed in Stratford.

“Both the storage facility and the peaking plant are important to security of electricity supply and better management of that supply in a dry year.”

In June 2008 Origin Energy Resource New Zealand (TAWN) Limited, and its subsidiary Origin Energy Limited and Contact Energy established the Ahuroa Gas Storage Project Agreement. Origin Energy Limited has a 51.4 per cent stake in Contact.

Since that time, the Origin/Contact consortium has been undertaking stage one operations under a licence to test for functionality.

Permit 52278 has been granted for 40 years. Details of the permit are available under the petroleum section of the Crown Minerals website at www.crownminerals.govt.nz.