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The energy industry is cushioning Port Taranaki from the shock loss last year of shipping a major portion of the region’s dairy exports. By Neil Ritchie.
He says the port has always done very well out of oil, gas and petrochemical production in Taranaki – New Zealand’s only commercial petroleum province, and the future looks bright. “The re-commissioning of one methanol train at the Methanex Motunui complex, the coming onstream of the Kupe gas field, and other exploration and developments were among the highlights for 2009.” Methanex New Zealand brought the idled methanol train back into full production during late 2008 and since then the port has been handling about 900,000 tonnes per year of exports, mainly to the Asia Pacific region. And the Canadian Methanex Corporation now believes it can run that train, plus perhaps one other (see feature in Summer 2009/2010 issue), right through to 2015, given the availability of enough economically priced feedstock natural gas, coupled with continued high international methanol prices. Last year’s methanol prices for the Asia-Pacific region, where most of Methanex New Zealand’s product goes, were in the US$200-300 per tonne range. However, they are now nudging up and were about US$350 at the end of January – though still short of the US$500-plus average achieved during 2008 before the international credit crisis knocked methanol demand. Barlow says the coming onstream of the Kupe gas field, the last of the big four offshore Taranaki energy developments of recent years, is adding another dimension to the port’s operations. While the port profits from all offshore energy exploration and development, including the Pohokura gas and Tui and Maari oil projects, Kupe is bringing bigger benefits. All condensate (light oil) extracted from the field is exported through the port, as is the associated liquefied petroleum gas (LPG). “The first load of Kupe condensate exported through the port in mid January was a significant milestone and it will be great to see the first export shipment of LPG during late February or early March,” says Barlow. Pohokura condensate is also exported through the port but not its LPG, though Todd Energy is planning to take it 26 percent share of Pohokura gas and to extract LPG from that by putting it through its $65 million LPG plant due to operating at the onshore McKee field by mid–2011. “We may even see some exports through the port of some of Todd Energy’s LPG when that project is completed, though most will probably be transported by road tanker,” Barlow adds. There has also been the construction of a new liquids pipeline, the first in about a decade, from the nearby Omata tank farm to the port’s Newton King Tanker Terminal for Kupe condensate. Field operator Origin Energy has also had two new storage tanks, each of 15,000-cubic-metre capacity, constructed at the tank farm to hold the condensate. Kupe condensate is being exported to refineries in New Zealand, Australia and the South Pacific, while the LPG will be shipped to coastal LPG facilities at such centres as Auckland, Wellington, Lyttelton and Port Chalmers. The field will supply 10-15 percent of New Zealand’s annual gas demand of 150-170 petajoules per annum, and more than half of the country’s LPG requirements of about 180,000 tonnes per annum over the next 15-20 years. The field is also expected to produce almost 15 million barrels of condensate. Port Taranaki has also been involved in the onshore energy scene. As well as the usual loads of drilling pipe, muds and other associated exploration equipment, the port has seen some special significant items destined for Contact Energy’s $250 million gas peaker project at Stratford. Last June the port welcomed the largest vessel to yet berth at the port – the 66.635 gross registered tonnage Tampa. Its one-off visit was to offload two 100MW gas-fired peaking generators, each weighing about 165 tonnes. Then the following month the Contact-chartered ship MV Pantanal arrived from Houston, Texas, with two high efficiency LMS-100 gas turbines – the first of their kind in Australasia – for the Stratford peaking plant. The vessel also brought a 70-tonne compressor, plus other items for the gas peaker. Barlow adds that another highlight was the official opening, by Prime Minister John Key, last September of the multi-million-dollar Port Taranaki Centre, nestled into land near the city’s Ngamotu Beach, also rates as a milestone in the port’s 100 year-plus history. He says the move to the new administration headquarters is opening up more land within the port boundaries for future expansion, some of which is already being used to store logs destined for export. And English born Barlow – who retires in April after almost 40 years with Port Taranaki – says that with the Pohokura, Tui, Maari and Kupe developments ending it is great to see another extensive exploration programme just about to start offshore. The giant semi submersible Kan Tan IV rig was due during February to drill at least six wells, from Northland to near the tip of the South Island. Successes in this drilling campaign could not only lead to a new and higher level of potential energy self sufficiency but it could also position the New Plymouth port perfectly for a more buoyant future. “It’s exciting to see another exploration campaign kick in, one that will utilise Port Taranaki as the supply base for the planned wells.” Various explorers will be spending hundreds of millions of dollars in the latest search for the so called black gold and the less lucrative but still nationally important natural gas. Barlow adds that Port Taranaki, “Is a major business in its own right and is of regional and national importance. It has a profound effect on the Taranaki economy, contributing, directly or indirectly, about 40 percent of the region’s gross domestic product and about 30 percent of the province’s employment.” Energy exports currently earn New Zealand about $3 billion per year and Energy and Resource Minister Gerry Brownlee recently claimed that could climb to about $30 billion per annum, given further commercial successes over the next few years. “So Port Taranaki’s influence will only grow if Gerry’s Brownlee belief in the potential of the New Zealand oil and gas, and petrochemical, sectors proves true,” says Barlow.
Energy NZ Vol.4 No.2 March-April 2010 |
Retiring port operations manager Captain Ray Barlow says the shock of Fonterra’s decision last year to pull two thirds of its Whareroa’s dairy factory products from the New Plymouth port, has been softened by an increase in energy-related exports. Fonterra’s move may strip away about one third of Port Taranaki’s container volumes that last year reached a record 65,168 TEUs (port talk for twenty foot equivalent units, a common container term).