Coal Seam Gas Deliveries Within a Year

The L&M Mining Group may be deliverying gas from coalbed methane deposits in Southland to Dunedin, Queenstown, and Invercargill within 12 months, according to L&M’s exploration manager David Manhire, in answer to a question at the NZ Petroleum Conference in Auckland.

The company is at the forefront of coal seam methane exploration in NZ, with a big focus on the massive lignite deposits it in the South Island. Manhire said advanced work had shown high methane content in low rank coals at Hawkdun and Kaitangata.

The concept is that, after recovery of the methane gas it will be contained in pipe-like storage than can be road trained distances of between 30 to 100 kilometres to the three major South Island centres. Studies had shown trucking distances greater than this may see L&M lose a competitive edge.

The company has been exploring the scope for coal seam methane in NZ for more than four years and Manhire said the potential of the lignites and other low rank coals to produce commercial quantities of gas was shown to him after visits to the big coal seam gas operations in the American State of Wyoming. Each project that L&M would set up has the capacity of producing 5 MW of energy and this could represent 250,000 GJ.

Could L&M have difficulty in securing its target markets in a competitive market? Manhire believed not.

The Energy Ministers presentation said the government could not lose sight of the fact lignite deposits in Otago and Southland hold an estimated 75,000 PJ of energy and that this equated to about 20 Maui fields.

He said significant proportions of these lignite deposits “are likely to be economically recoverable.”

“The real value in developing these vast resources may be to provide a chemical feedstock rather than a primary energy fuel. A technology, which looks increasingly feasible, is to convert lignite to synthetic gas, from which petroleum fuels, methanol, ammonia/urea and electricity can be produced,” the Minister said.