Gas project firing up

20:38, May 18 2014
The Mangahewa Expansion Train 2 was opened by Economic Development minister Steven Joyce on May 8.

One of the country's most significant gas projects near sleepy Tikorangi will produce economic effects that will be felt throughout the country for years to come.

Todd Energy's $120 million Mangahewa Expansion Train 2 (Met2) facility was recently opened by Economic Development Minister Steven Joyce.

It's part of an $850m expansion project that involved the construction of a high-pressure gas processing plant and will mean the drilling and hook-up of 27 wells in the Mangahewa permit area and the construction of a 9km pipeline connecting well sites to the production station, then on to the Maui pipeline.

The creation of the new gas production facility at the site near Tikorangi, about 20km north-east of New Plymouth, means Todd can more than double its raw gas processing capacity from 20 to 45 petajoules a year.

The facility should be running at full capacity by October and Todd Energy chief executive Paul Moore says that's a big deal.

"To put that in perspective I should point out that total yearly natural gas demand for residential use in all of New Zealand is about six petajoules."


Much of the natural gas produced at the site will go to to Methanex as part of a 10-year sales agreement between the two companies.

The deal, struck in 2012, meant Todd Energy could build the facility which would allow it to supply Methanex with gas, in turn allowing the Canadian methanol producer to restart the second manufacturing plant at its Motunui facility and its smaller Waitara Valley plant.

The deal was good news for Port Taranaki and its owner the Taranaki Regional Council.

The port's record for annual trade of 5.64 million tonnes was achieved in 2002 - when Taranaki's methanol industry was last at its production height.

The Met2 project was conceived in late 2011. Earthworks began in November 2012 and the facility was commissioned between December and February 2014.

More than 218,000 hours were spent on the development of the site, which at its peak occupied about 140 people.

The Mangahewa and McKee production stations currently have around 80 workers there daily - a mix of staff and contractors, and the average daily number engaged at the station and associated facilities is about 130.

The processing plant's main units were fabricated by Propak Systems in Calgary, Canada, before being trucked to Houston, Texas, then shipped to New Zealand in about 30 pieces.

Once on-site, modules were installed by Worley Parsons.

The facility's pipe rack was built by Whangarei firm Culham Engineering, the hot oil heater by New Plymouth's Fitzroy Engineering and other Taranaki companies, including Energy Works, Taranaki Engineering and Tenix were also involved in the project.

The Mangahewa site was bought in 2002 by Todd Energy from oil giant Shell and in 2006 Todd Energy took over from Shell Todd Oil Services as the operator of the McKee and Mangahewa assets.

The new Met2 facilities, the concept for which was developed between 2011 and 2012, process raw wellstream fluids from the Mangahewa field into gas, LPG, condensate and water.

Moore says the $850m project has brought significant economic benefits to Taranaki and ultimately to all of New Zealand.

"As the expansion activity continues over coming years it will continue to create significant employment, GDP, royalties and tax benefits."

The Mangahewa field was discovered in 1961 in a joint venture between Shell, BP and Todd but the Mangahewa-1 exploration well was deemed sub- commercial.

In 1979 state-owned company Petrocorp drilled and abandoned McKee-1.

In 1997 the asset's new owner Fletcher Challenge Energy drilled Mangahewa-2 and in 2001 it was sold on to Shell International.

Part of Todd Energy's spend on the project included the investment of $42m on a 450-tonne German-built Bentec Model Euro Rig rig aptly nicknamed "Big Ben."

Since its arrival at the beginning of this year, the rig has drilled one well at the site, with another four on schedule.

The rig is quiet and can move more quickly with fewer loads to reduce road traffic.

Todd Energy, like the other oil and gas player in Tikorangi, Greymouth Petroleum, is 100 per cent New Zealand-owned.

Its parent company Todd Corporation also owns Ara Wines, Integria Healthcare, Nova Energy, Todd Minerals and Coal and Todd Property and has investments including a New Zealand marine tidal energy development company, an Australian wireless infrastructure company, South Louisiana Methanol in the US and tungsten and molybdenum mining in Canada.

BY THE NUMBERS $850 million invested in the expansion project

$120m on the Mangahewa Expansion Train 2 (Met2)

80 employees or contractors on the Met2 site each day

600 screwed piles installed

1000 cubic metres of concrete foundation poured

41 modules and vessels moved 18,000 kilometres

1100 tonnes of equipment installed 2400 ship loose items fitted

425 spools and 4000 weld inches completed

51,000m of cable pulled and terminated more than 218,000 work hours spent on site

Taranaki Daily News