Energy gateway

Port Taranaki and the New Zealand energy industry have been inextricably linked for over 140 years – since the first oil well in the former British Empire was dug by hand near where the New Plymouth port now stands.  BY NEIL RITCHIE

Since the first oil well coughed up its modest amount of oil almost a century and a half ago, the Taranaki region, its people and port have built up an enviable energy expertise that is in demand in many parts of the country and overseas.

The New Plymouth port has become the ‘gateway’ to the country’s entire energy sector as Taranaki is still the country’s only commercial oil and gas region, and its only petrochemical (methanol, ammonia and urea) province.

The region also exports its energy expertise, sometimes through Taranaki people working overseas, but also by companies shipping specialist equipment out through the port – the latest example being Fitzroy Engineering Group barging a 455-tonne catalytic reactor package to Shell’s Clyde Refinery in Sydney in mid-February.

Port operations manager Captain Ray Barlow, says Port Taranaki has never been busier with offshore oil and gas development, with about $3 billion due to be spent on a quartet of major projects between the years 2006 and 2009.

He likens the current environment to the halcyon days of the development of the offshore Maui gas field, but adds that the Pohokura and Kupe gas projects, together with the Tui and Maari oil developments, involve a more diverse range of activities.

With Maui there were semi-submersible rigs and drill ships, their supply vessels, heavy-lift vessels, barges and giant jackets, or legs, and associated topsides modules – with the first platform during the 1970s and then with the second platform during the early 1990s.

Now the port company has diversified and is able to offer a much broader range of services than it did 40 or even 20 years ago – from providing vessel support for unloading rigs from heavy-lift vessels and helping with crew and equipment changes, to storing a myriad of energy supplies and equipment.

Barlow says the port also offers storage areas for specially made concrete mattresses or for rocks hewn from Taranaki quarries, which are now stabilising parts of the Pohokura and Kupe underwater pipeline routes in the harsh Tasman Sea.

The recently completed $340 million Tui Area oil field development, the almost finished $1 billion Pohokura gas development, together with the developing $1.08 billion Kupe gas and $590 million Maari oil projects, have meant constant streams of vessels in and out of the port for two years now and this is scheduled to continue until at least mid-2009.

Last year, regional economic and tourism development agency Venture Taranaki commissioned Business and Economic Research (Berl) to undertake a study into the economic impact of Port Taranaki – New Zealand’s second largest export port by volume and fourth largest by value.

Port Taranaki expects, for the 2007-08 June financial year, to transport over 3.5 million tonnes of goods, valued at $3 billion or more.

The Berl report highlighted the importance of the oil and gas and petrochemical sectors to the port and its operations.

Berl found that during 2006, the Taranaki regional economy generated about $4.38 billion in gross domestic product (GDP) through about 12,800 businesses that employed about 45,000 fulltime equivalent (FTE) positions.

And Port Taranaki was a key participant in those industries or activities that accounted for about 43 percent of that GDP and about one third of its employment.

The report also found the port provided services to the province’s main export earners and key economic drivers; the oil and gas, petrochemical, engineering, dairy and meat processing industries.

The top three commodity groups – dairying, oil and gas, and meat – accounted for about 92 percent of all port exports by value, with oil and gas contributing 29 percent of that.

But by volume, energy becomes more significant, with about 67 percent of all port trade related in some way to energy. Liquid bulk products, crude oils (45 percent) and methanol (25 percent), dominate export volumes. Almost 90 percent of all our oil and gas exports are through Port Taranaki.

An industrious future

And the methanol trade should increase further, given the likely partial restart later this year of the Methanex methanol manufacturing complex at Motunui.

Energy-related imports could also increase if Contact Energy and Genesis Energy proceed with their plan to import gas through the port from early next decade as liquefied natural gas (LNG).

Berl also found that the energy industry increases the viability of the port, while the port ensures the continuing viability of the energy sector.

It said that Taranaki and its port already had the infrastructure, industry and experience to support the broad energy sector – something that could not be replicated without significant additional time, cost and resources.

The port is also benefiting from the Government’s move away from fossil fuels and toward renewable energy.

Early last year, international freight forwarder and logistics firm Deugro supervised the unloading and transporting of some super-sized wind turbine units at the port for renewable electricity player TrustPower for its Tararua Wind Farm near Palmerston North.

One of the reasons Deugro chose the New Plymouth port was its experience in handling heavy large loads. The TrustPower turbines had 45 metre-long blades, 22 metre high towers, 78-tonne power units and stood 120 metres tall when erected.

As well, Southland has already sent representatives to Taranaki and its port as they anticipate energy exploration increasing in the often wild waters of the Great South Basin off the bottom of the South Island over the next few years.

Invercargill’s port company South Port has also joined the New Plymouth-based New Zealand Oil and Gas Specialist Technologies Group chaired by Port Taranaki’s tanker terminal manager Arun Chaudhari.

The group, facilitated by Venture Taranaki, consists of companies providing a range of technical specialist support services to the oil, gas and broader energy sectors.

Port chief executive Roy Weaver Port says Port Taranaki, as New Zealand’s only west coast deepwater port, is the sole “west gate” for importers and exporters alike.

“The port is also fortunate that it is located in the heart of the country’s energy industry, and its nearly 40 years of experience in this sector has enabled it to build a large bank of knowledge and develop a wide range of skills,” he says.

“We are at the forefront of the New Zealand energy industry and I am sure that with all the scheduled oil and gas exploration, together with continued diversification into new energy sources, Port Taranaki will remain the energy gateway to New Zealand for a long time.”