Kupe's village

The multicultural, international Kupe onshore production station site, west of the town of Hawera, and part of the $1.1 billion Kupe energy development, has become a thriving village writes NEIL RITCHIE.

Taranaki is used to hosting multi-cultural events, such as the Womad (World of Music Arts and Dance) festival, but the multicultural Kupe onshore village has its own streets, buildings, eating houses and amenities blocks, complete with some nearby flora and fauna, and some spectacular scenery on a clear day of Mount Taranaki, the Tasman Sea, lush farmland and bush.

The nationalities involved range from French firm Technip, which is managing the project in an alliance with field operator Australian integrated energy company Origin Energy, to the English and Scots employed by Origin and Technip in Perth, to the Aussies and Kiwis working at the site or in the New Plymouth office, the project’s New Zealand headquarters.

Origin Energy Kupe project director Peter Ashford (pictured), says the Kupe project is now more than 84 percent complete, with first commercial gas to shore still scheduled for mid-2009.

He says the offshore programme is now finished and the three production wells, offshore platform and pipeline to shore are ready to produce once the onshore facilities are complete.

“The offshore programme has progressed particularly well and has been completed to plan,” Ashford says, adding that onshore work, which constitutes about half of the project in financial terms, is also going well, with the focus on the construction of the production station itself. 

Not since the giant $2 billion Synfuel Motunui gas-to-gasoline project of the early to mid-1980s has any onshore development in Taranaki been so obvious to the general public. The site is huge, covering over 17.5 hectares of land off Inaha Road, and there are lots of vehicles, including about 15 buses that pick up workers from around Mt Taranaki, taking them to the “village” and dropping them off again after their shifts, six days a week.

Site works started in October 2006 and the design of the production station was finished some time ago. Engineering work is now finished and construction work is over 50 percent complete.

Most of the major pieces of equipment are now on site and erected. All eight LPG bullets are installed and all the columns have been erected. Work is now focusing on the erection of structural steel and piping, and electrical and instrument installation. To minimise work at the production station, most pipe spools are being fabricated offsite at various fabrication shops around Taranaki and then trucked to the site for erection.

Ashford says the sales gas pipeline from the onshore production station to the nearby Kapuni gas treatment plant further inland has also been completed.

The procurement activities are in the final stages and the present focus is on expediting the release and delivery of the remaining equipment.

“Commissioning of some of the first systems will commence in the next couple of months,” he says.

Early this year more than 120 people on site had worked over one million hours with no lost time incidents (LTIs). That number has now grown to about 500, as construction activity peaks, and the project is approaching three million hours worked. As of early August, there had only been one LTI, a crushed finger, at the production station – a record the Origin-Technip alliance is proud of.

“In statistical terms, this compares very well with other projects around the world, though we strive for no accidents at all and continue to look for ways to improve our safety performance,” says Ashford.

The production station will take and process the Kupe raw gas stream and separate that into sales gas, condensate (the light oil often associated with gas) and liquefied petroleum gas (LPG).

The condensate and LPG will be taken by road tankers to the port, while the sales gas will be piped to the Kapuni processing plant for reticulation in the North Island high-pressure pipeline network. Partner integrated energy company Genesis Energy has rights to all Kupe gas.

Each partner will sell its own share of condensate and LPG. The condensate will be exported from Port Taranaki, with initial flows of about 7000 barrels per day.

The Kupe joint venture is also having two storage tanks and export facilities constructed at the Omata tank farm above Port Taranaki to hold the condensate.

Ashford says the alliance contract between Origin and Technip has enabled the two to work on the project as a single unified team, and this approach has proven to be “very successful, very flexible and collaborative”.

The principles of collaboration and cooperation have also “percolated down” to subcontractors, he adds.

“And the project continues to receive excellent support from a number of New Zealand companies and agencies, particularly in New Plymouth, the rest of Taranaki and in Picton, where we had our pipe spoolbase for the offshore pipeline.”

Energy industry veteran Chris Bush, who heads Origin’s New Zealand operations, says Kupe is the most exciting project he has worked on and is Origin Energy’s biggest undertaking yet in New Zealand. He says it ranks alongside the other major offshore Taranaki developments – the Tui and Maari oil and Pohokura gas projects – as the most important to Taranaki and the national economy since the region’s major energy projects completed in the 1980s.

He adds that Kupe is a strategic development that will provide about 20 petajoules per annum of sales gas (about 11 percent of the country’s needs) and up to 90,000 tonnes per annum of LPG (about half the country’s needs) for perhaps 20 years or so.

The field’s total estimated recoverable reserves are 254 petajoules of gas, 14.7 million barrels of condensate and 1.1 million tonnes of LPG.  Bush says that when Kupe starts producing it will make a substantial increase, by an order of magnitude, to Origin’s oil and gas production and to the amount of product pumped through Port Taranaki at New Plymouth, hence the need for the new storage tanks at Omata.

Presently all of Origin’s New Zealand production comes from the small onshore Taranaki oil and gas fields of Rimu, Kauri, Tariki, Ahuroa, Waihapa and Ngaere.

The Kupe partners are operator Origin Energy (50 percent), Genesis Energy (31 percent), New Zealand Oil & Gas (15 percent), and Japan’s Mitsui Corporation (four percent).