Page 6 - GLNG Week 09 2021

GLNG COMMENTARY GLNG

regulatory settings for offshore exploration; the two plants at Motunui open. However, Meth-
dry hole at OMV’s Tawhaki permit; the recent anex has launched an organisational review in
announcement terminating Wherry-1 drilling; the face of lower availability.
and the effects of COVID on drill rig costs and New Zealand’s gas production peaked at
availability have formed a perfect storm, mak- 243.49bn cubic feet (6.9bn cubic metres) in 2001
ing the task of finding suitable partners in the before falling to 171.32 bcf (4.85 bcm) in 2019,
required timeline impossible.” according to Ministry of Business, Innovation
After deciding not to drill the deepwater and Employment (MBIE) data.
Wherry-1 exploration well in PEP3864, Beach Taranaki Chamber of Commerce CEO
abandoned all three of its exploration permits in Arun Chaudhari told Stuff that unlike in past
the offshore Canterbury Basin, while retaining instances of mothballing, there was less con-
its interests in the Taranaki Basin. fidence that the plant would restart owing
NZOG has been an outspoken critic of the to the fact that less offshore exploration was
government’s ban on new offshore explora- planned.
tion permits, noting in 2018 that the decision New Plymouth Mayor Neil Holdom said: “It
would drive it to look for new opportunities was inevitable, given our government seems It is not just
overseas. Jeffries said at the time that investing determined to end the oil and gas industry in
in upstream assets in other jurisdictions would New Zealand as soon as they can with increased upstream
allow the company to “manage the risks associ- coal use likely to make up much the shortfall in investors that are
ated with the government’s policy change”. energy demand in the short to medium term.”
He added that Wellington’s decision was The New Zealand government has stuck to reviewing their
short-sighted, as two-thirds of the country’s its guns about offshore exploration and its asso-
energy use was for industry and transport and ciated environmental costs. Having declared position in the
there were no economically viable renewable in 2019 its ambition to reach net-zero carbon
alternatives. It is not just upstream investors emissions by 2050, Wellington sees the oil and country, however.
that are reviewing their position in the country, gas industry as an obstacle to achieving this goal.
however. While a future study could advocate for the
development of LNG import capacity, the gov-
Downstream doldrums ernment will surely be worried about political
Canada-based Methanex revealed last month fallout from such a move. It may instead prefer
that it would mothball its methanol plant in to wait and see whether falling gas produc-
Waitara Valley in Taranaki after being unable to tion continues forces Methanex to relocate its
secure sufficient gas supplies. The company said operations overseas. This would free up gas
it would restart the plant if gas supplies became supply for other sectors, which could allow
available. the government to avoid addressing the prob-
Methanex, which consumes around 40% of lem of a potential gas supply shortfall for a
the total gas supply, has said it would keep its number of years.™

P6 www. NEWSBASE .com Week 09 05•March•2021