The beginning of offshore exploration
By the early 1960s, changes in technology made it possible to explore for oil and gas in shallow offshore waters. After passing the Continental Shelf Act in 1964, the New Zealand government began allocating the first offshore exploration licences. Seismic surveys revealed a number of possible structures, and in early 1969 the ship Discoverer II was brought to New Zealand to drill the first offshore holes.
The third hole drilled found gas and some condensate (light oil) in a large dome-like structure 33 kilometres off the Taranaki coast. This came to be known as the Māui field.
The gas problem
More than eight times larger than the Kāpuni gas field, Māui was big on an international scale. It was not clear how the gas could be used, especially as it would be expensive to develop offshore facilities, and Kāpuni already met all of New Zealand’s gas needs.
In 1973 there was a sudden, worldwide increase in the price of oil following war in the Middle East. This had a dramatic effect on the New Zealand economy. The government decided to burn Māui gas to generate electricity and extract the accompanying condensate for use as fuel. As part of an agreement with the Shell–BP–Todd consortium to develop the Māui field, a take-or-pay agreement was signed. This obliged the government to pay for an agreed amount of gas every year for 30 years.
Development of the Māui field
An offshore platform (Māui A) was built in 1979 to extract the Māui gas and condensate. A second platform (Māui B) was built in 1993 to allow extraction of additional hydrocarbons. This discovered significant amounts of previously undetected oil. Oil and gas from Māui B are transported to Māui A by a sea-floor pipeline and from there to shore.
The amount of gas needed for electricity generation was less than estimated. Penalised by both the take-or-pay agreement and soaring international oil prices in 1979, the government embarked on a radical plan that became known as Think Big. Two petrochemical plants were built in Taranaki to use Māui gas for industrial development.
The most ambitious of these was the Motunui synfuel plant – the first of its type in the world, which converted gas to methanol (methyl alcohol), then to synthetic petrol. While technically successful, it began losing money when world oil prices fell in the late 1980s. The Motunui plant then switched to making methanol for export, which is what the Waitara valley plant did.
As the Māui gas field began to run out in the early 2000s, these plants no longer had a cheap supply of gas. Motunui closed in 2004, and the Waitara valley plant ceased production in 2005.
A gridiron scrum
The only way to get to Taranaki’s offshore oil platforms, Māui A and Māui B, is by helicopter. Wearing a bulky survival suit in case of ditching into the sea, a 1994 journalist found the ride far from comfortable: ‘It’s definitely not business class inside. Passenger seating consists of two padded benches facing each other, and we are packed in tight. With headsets on to deaden the racket, we look like a gridiron scrum about to go down.’ 1
Electricity and heating
Gas for electricity generation is piped to stations in Taranaki, Huntly and Auckland. Electricity production from gas grew steadily from the 1970s, then declined in the 2000s as the Māui field was depleted. Gas provided 16% of the country’s electricity in 2005, down from 30% three years earlier.
Gas is also reticulated for industrial and domestic consumption, which absorbed about 30% of production in 2005. This is transported around the North Island through 2,600 kilometres of high-pressure pipelines.
LPG and CNG
Minor uses of the gas are as LPG (liquefied petroleum gas) and CNG (compressed natural gas). There has been revived interest in the use of LPG as a vehicle fuel since the international oil price rose after 2003. Unlike CNG, LPG is distributed in the South Island.
CNG was a popular substitute for petrol in vehicles in the North Island. CNG sales rose rapidly and peaked in 1985. The decline in international oil prices over the 1980s saw CNG’s popularity wane, but there has been a slight growth in CNG production over the 2000s.