Macdonald Investments awarded first coal seam gas mining permit

MIL is a private investment company specifically dedicated to coalbed methane exploration. It was formed in 1978 and owned largely by shareholders of RC Macdonald Ltd, the Wellington international trading company.

Petroleum Mining Permit 50100 covers a 170 sq km area both north and south of the Grey River from approximately 2km to15 km inland from Greymouth.

Project manager for MIL’s Westgas coalbed methane project Alberto Kamenar, of Kamenar and Associates Pty Ltd said: “We believe that our permit in Greymouth has all the right ingredients to become a successful methane gas development project.”

“We do not have access to a pipeline infrastructure in the South Island to deliver natural gas to the markets,” Mr Kamenar said. “However this project could supply the gas to run a small electricity generation facility to initially deliver 20 MW into the local electricity grid.

“When mature, the project may be able to deliver in excess of 50 MW. This level will supply the energy needs of approximately 50,000 homes every year for 20 years.”

Mr Kamenar said that MIL was targeting the Brunner and Paparoa coal seams that extend over a large area. The amount and type of coal intersected at each well varied because of the depositional environment, faults etc. “Initially we will target coal seams between 200 and 1000 m deep”, he said.

The permit is divided into a large central region mostly around the Grey Valley, a southern region south of the Kaiata range and a north-east area towards Blackball.

Mr Kamenar said the company’s earlier exploration in the area tested mainly in the central and southern areas with a combination of seismic surveys and drilling. The northern area will require some additional drilling work before the company could develop it further.

The work programme for the mining permit, which has been awarded for 40 years, requires more exploration wells followed by at least four or five appraisal wells for a long-term production testing pilot in the central and southern areas by the fourth and fifth year respectively. In the northeastern area the long term appraisal is not required until the seventh year.

The permit work programme requires that after the long-term testing in each of the three areas, an ongoing programme of mining can be negotiated in each area or part of the permit surrendered.

Source: Macdonald Investments