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L&M Coal Seam Gas says its potential NZ gas prospects now 1.2 TCF
30 September 2008, Source: L&M Coal Seam Gas and Lindsay Clark - A new potential in-ground gas resource of 1.2 trillion cubic feet has been declared by Christchurch-based L&M Coal Seam Gas Ltd including an estimated 780 PJ from one permit in south Waikato.
The newly appointed chief executive of the private company Kent Anson, said extensive previous exploration by L&M now showed there was a nationally significant resource of coal seam gas in New Zealand. The gas is about 98% methane, almost identical to natural gas.
He said L&M Coal Seam Gas is now moving from explorer to developer and producer.
Mr Anson, an Australian engineer who has more than 10 years experience in the burgeoning CSG exploration and production in Queensland, was previously India country manager for the Australian-based CSG company Arrow Energy. He has been hired by the L&M Group to turn their coal seam gas exploration subsidiary’s results into commercial production.
Though initial uses were likely to be in distributed power generation and supplying gas to industry, the company was also looking at supplying bottled gas as CNG (compressed natural gas) to replace diesel and petrol in trucks and cars.
CNG was first used in New Zealand cars in the 1980s but the market has declined severely in recent years.
Mr Anson said L&M Coal Seam Gas plans an aggressive appraisal programme over the next year in Southland and Otago where the company holds an estimated potential resource of 400 PJ of gas.
He said the company will drill three separate multi-hole pilot programmes over the next 18 months in Otago and Southland with the aim of certifying an initial tranche of gas reserves.
The first appraisal pilot programme will be drilled on the Kaitangata coal field, 50 km south of Dunedin, which contains a potential resource of 54 PJ.
This will be followed by another 5-well pilot at the Ohai coalfield in western Southland (150 PJ) and another pilot in the remote Hawkdun 57 PJ lignite field north of Alexandra in Central Otago.
The Kaitangata field near Balclutha contains 2 billion tonnes of subbitumous coal at depths up to 500 m with seam thicknesses up to 15 m.
L&M expects to commission the Kaitangata pilot wells in November this year and have its first tranche of coal seam gas reserves from this test by the middle of next year.
In the Ohai field L&M Coal Seam Gas has drilled 10 previous exploration holes. They have found coals with high gas content of 10 cubic m of gas per tonne of coal.
The Ohai resource contains multiple seams of coal, some up to 15 m thick with a net depth of 50 m going down to 800 m.
The South Waikato prospect in the large (3920 sq km ) PEP 50348 running south of Hamilton to Te Kuiti is a promising area for coal seam gas.
Though L&M Coal Seam Gas has held the permit only since March this year, south Waikato holds estimated resources of over 6 billion tonnes of coal at drillable depths in known fields, including some which have not yet been mined.
The permit has a major transport advantage of sitting astride the gas pipeline route from the Taranaki gas fields to Huntly power station and Auckland.
Mr Anson said world coal seam gas resource estimates have grown rapidly recently to about 6,000 trillion cubic feet, about an equal amount to estimated natural gas resources in the world.
