The Kupe project is developing a gas and light oil/condensate field that lies in the offshore Taranaki basin, New Zealand, approximately 30km off the coast in water depth of about 25m. The project is scheduled to commence full production in mid-2009.
Latest Kupe News:
The drilling and testing of the three Kupe Development Wells in PML 38146 was successfully completed in early June 2008.
The three wells have been safely suspended pending the completion of the onshore production station.
Preliminary analysis of the well results, and in particular the well testing, confirms that the wells and the reservoir have met expectations.
The Kupe joint venture partners are:
New Zealand Oil & Gas Limited* 15%- Origin Energy - 50% (Operator)
- Genesis Energy* 31%
- Mitsui E&P Australia Pty Limited 4%
*via subsidiaries
Origin Energy is the Operator of the Kupe Project, on behalf of the Joint Venture.
The Development
The Kupe project is developing the Kupe Central Field Area (CFA), within PML 38146. The initial development comprises three wellheads, a normally unmanned offshore platform, a 30 km pipeline to shore, an onshore production station near Hawera, and oil storage facilities at New Plymouth.
The onshore production station, 12 km west of Hawera, will process the raw gas to meet the specification for the main North Island gas transmission system and separate out the light oil/condensate and liquid petroleum gas (LPG). The condensate will be transported to Port Taranaki (New Plymouth) for export, while the LPG will be sold into the domestic New Zealand market.
The Final Investment Decision was made in June 2006 based on a budget of NZ$980 million. In July 2007 the Operator, Origin Energy, advised that the project has experienced cost pressures which had increased the expected project cost by around 10 per cent.
NZOG’s share of the development is approximately $165m. The initial $50m was funded from equity. Since then the development has been funded from a Westpac debt facility. Going forward, NZOG will also meet some of its Kupe commitments from cash funds in place of this facility.
Reserves
At the time of the investment decision in June 2006, recoverable 2P (Proven and Probable) reserves for the Kupe CFA were estimated to be:
* 254 petajoules of sales gas (NZOG’s share 38PJ)
* 14.7 million barrels of light oil/condensate (NZOG 2.2 mmbbls)
* 1.1 million tonnes of LPG (NZOG 165,000 tonnes)
A reserve reassessment is expected following full analysis of information gained during the development well drilling.
Production
The development schedule is for the field to be in commercial production by mid-2009, following completion of commissioning activities. The life span of the production is estimated to be 19 years.
NZOG has entered into a long-term gas sales agreement with Genesis Energy for its share of Kupe gas. Genesis Energy is a state owned electricity generator and retailer, and gas wholesaler and retailer, and a 31 per cent partner in the Kupe project.
History
The Kupe central field was discovered by NZOG in 1986 with the drilling of the Kupe South-1 exploration well. Read more »
History
The Kupe South-1 well (KS-1) drilled in 1986 flowed 2000 bopd and 5.4 mmscfgd. This discovery well was followed by the drilling of the Kupe South-2 (KS-2) well in 1987, and the Kupe South-3 wells and 3a sidetrack (KS-3), drilled in 1988.
The KS-2 and the KS-3 both encountered a stratified hydrocarbon reservoir with a significant oil column underlying a thick natural gas column. These three wells formed the basis for the Kupe Central Field Area (CFA) development, proposed in a 1999 FEED engineering development study. However, the development remained sub-economic because oil prices were low and New Zealand gas prices were very low as a result of the existing arrangements for the sale of gas from the large Maui field.
This situation changed as the Maui field entered into its decline phase and international oil prices increased. The Final Investment Decision for the development project was made on 29 June 2006.
Geology
The primary reservoir of the Central Field Area is the Paleocene Farewell Formation. Read more »
Geology
The Farewell Formation sandstone reservoirs are interpreted as being deposited in dominantly interbedded fluvial (river) and lacustrine (lake) sandstones.
The reservoir sandstones of the Farewell Formation are predominantly medium to coarse grained quartz and feldspar, with good porosities and permeabilities, ranging to over 1 d'arcy permeability in places. The sandstone members are compositionally immature and feldspar-rich, making them an arkosic to subarkosic sandstone reservoir.
After deposition and burial by overlying shales, the sandstone reservoir and shale seal in the Kupe field area were inverted (i.e. uplifted), and bounded by faults acting as lateral seals.
The hydrocarbons in the field were derived from Late Cretaceous to Paleocene, organic-rich, sedimentary source rocks which were thermally cooked in the basin kitchen areas after deep burial, and then migrated updip into the shallower sandstone units within the structural traps.
Kupe central field [65kB]
Kupe Schematic [787kB]
