The Ahuroa gas storage facility near Stratford is a New Zealand first and has involved a series of commercial and engineering innovations to make it work.
The $170 million plant, which still has scope for further expansion, allows the company to store gas during periods of low demand and quickly extract it when needed. It can deliver up to 45 terajoules of gas a day to Contact's power plants at Stratford, or it can export to the Vector gas network.
The project was developed with Contact's major shareholder Origin Energy, which processes oil and gas from the TAWN fields at Waihapa.
An early design goal was to re-use as much of the existing Waihapa plant as possible, adapting its gas-export compressor for injection work, and integrating the control systems across the two projects.
By building its own gas hub independent of the existing pipeline network, Contact can supply gas directly to its thermal power stations without having to nominate gas usage, flow rates or pressures.
Unlike most other storage systems, Ahuroa is extremely flexible. A standby mode keeps the plant heated and ready for rapid start-up, while gas is kept circulating even in hold mode to speed the operation.
Data from permanent down-hole gauges is analysed using the Kappa Ecrin package to monitor well performance and reservoir behaviour. Contact says the level of automated analysis at Ahuroa has been described as state-of-the-art by world experts in the field.
Starting the country's first gas storage project also involved complex commercial negotiations for the use of Origin facilities and their ongoing management of the site. The project's place within the petroleum permitting regime also had to be resolved, including whether royalties were payable on gas extracted. A mining permit for the project was awarded in December.
Contact's new storage capability, coupled with the earnings potential of the Stratford peaker, protects the value of gas the company is obligated to take under take-or-pay contracts. Longer-term it may enable the company to contract for more stable volumes, potentially at lower prices than would otherwise be the case.
The facility also means that gas is available when the grid needs it, providing security of supply to New Zealand when weather-dependent renewable generation is unavailable.
In 2011 the Innovation in Petroleum Award category was sponsored by ITL