The Wealth Beneath Our Feet - full report (6.4 MB ... - Venture Taranaki

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3.2 MidstreamMidstream comprises the refining of raw crude oiland natural gas into marketable products, and theirtransmission to those markets. While some users maytolerate petroleum products within a wider range ofspecifications, most shared delivery systems (pipelines)and logistics require tight product specifications toensure user safety, that the product meets environmentalstandards, and the narrowing tolerances of end userequipment such as car engines, turbines and householdappliances. Accordingly, refineries produce a wideningrange of tightly specified products such as motor fuels,petrochemicals (including pharmaceuticals, solvents,fertilisers, pesticides, and plastics) and natural gas.The midstream (and downstream) activities for gasare quite distinct from oil. Such activities include:••Gas processing facilities to ensure gas meets pipelinespecifications (for transmission). This may includeseparation of liquids (condensate, LPG) andremoval of various impurities (nitrogen, CO2, sulphur);••The gas transmission network linking Taranaki fields tomarkets, comprising Vector, linking most North Islandurban centres, and the high-capacity Maui pipeline,owned by Maui Development Companies, from Oaonuito Rotowaro (Waikato);Midstream oil activities separate from gas activities atfield production stations. These include:••Pipeline and road transport infrastructure from thefields to central storage facilities near Port Taranaki(in a variety of ownership);••Export from Port Taranaki of almost all of New Zealand’scrude oil products, principally to Australian and Asianrefineries. These are able to pay a higher price thanNew Zealand’s own refinery at Marsden Point;••Processing of imported crude oil products (largelyfrom Mid-East and Asia) at Marsden Point refinery. TheMarsden Point refinery was materially upgraded duringthe 1980’s and is not optimally configured to processNew Zealand’s sweet light crude oils; and••Transportation of processed products to nationalstorage centres (Whangarei, Auckland, Tauranga,New Plymouth, Napier, Wellington, Nelson, Lyttelton,Timaru, Port Chalmers, Bluff):--from Marsden Point by ship or via pipeline to Wiri,Auckland; or--through direct imports of processed petroleumproducts (increasingly important as nationaldemand rises - now accounts for 30 percentof market demand).••Major wholesale / industrial users such as electricitygenerators and petrochemical plants (sometimesconsidered part of the downstream); and••Import–export links, which are limited to:--Methanol – exports by Methanex, dependent onaccess to domestic gas;--LPG – imported and exported to balance supplyand demand variations; and--Urea – local production by Ballance Agri-NutrientsLtd (40 percent of total New Zealand urea demand),supplemented by imports (60 percent).16The Wealth Beneath Our Feet
3.3 DownstreamThe downstream O&G industry covers the marketing, tradingand local distribution of petroleum (and petrochemical)products to end users. These range from major wholesaleusers such as electricity generators and industrial plants,to retail markets. The largest volumes of petroleumproducts are diesel (fuel oil), petrol (gasoline) and avgas(jet kerosene). Petroleum is also the feedstock for thepetrochemical industry which produces pharmaceuticals,solvents, fertilisers, pesticides, and plastics.New Zealand’s downstream natural gas activities arelargely governed by the capacity and location of theNorth Island’s current gas reticulation network.Natural Gas industry summary 2009Downstream gas activities include:••Gas trading, marketing and retailing;••Oil product marketing and trading;••Local distribution by truck; and••Storage and retailing.There are numerous companies involved, mostly integratedwith mid- and upstream activities (such as Genesis Energy,Contact Energy, Vector, Todd Energy) and others simply asdownstream gas companies (traders and retailers). Thematerial downstream players in the New Zealand O&Gindustry are Shell (now Greenstone), BP, Mobil, and Caltex/Challenge, with smaller new entrants such as Gull operatingin some regions.The O&G industry is often defined by upstream activity,which is the primary determinant of incremental economicactivity in Taranaki and New Zealand. However, thisreport also considers demand-based midstream anddownstream activities.MAJOR GASFIELDS (PJ)Mckee10.64Mangahewa5.85Maui56.11Kapuni17.53Kaimiro/Ngatoro1.84Turangi7.70Pohokura69.02PRODUCERSWHOLESALERSTodd Taranaki100%Operator ToddEnergyShell 83.75%OMV 10%Todd Energy 6.25%OperatorSTOSShell 50%Todd Energy 50%OperatorSTOSWholesale Market (bilateral)Greymouth 100%OperatorGreymouthShell 45%OMV 26%Todd 26%OperatorShellTRANSMISSIONHIGH PRESSUREMDLVectorDISTRIBUTIONLOW PRESSUREGenesisPowerco Nova Energy Vector WanganuiGasGreymouthPetroleumRETAILERSEnergyCONSUMERSMethanexChemicalMethanolManufactureSource: MED, RockpointBallance Agri-Nutrients(Kapuni) LimitedAmmonia/UreamanufactureContact EnergyGenesis EnergyElectricityGenerationOther major users supplieddirectly from transmissionsystemBHP NZ SteelCarter Holt HarveyDegussa PeroxideFonterraTodd EnergyKiwi CogenerationNZ Refining CompanySouthdown CogenerationTasman Pulp and PaperUsers suppliedfrom distributionsystemOther IndustryCommercialResidentialThe Wealth Beneath Our Feet17
Page 1: The Wealth Beneath Our FeetThe Valu
Page 5 and 6: Executive summaryThe Oil and Gas (O
Page 7 and 8: ••Being global the O&G industry
Page 9 and 10: Total jobs = 7,700*GDP = $2.5 billi
Page 11 and 12: Economic contribution 2009 (Taranak
Page 13 and 14: The Wealth Beneath Our Feet11
Page 15 and 16: While the public at large is famili
Page 17: Tui Oil FieldThe Tui field, brought
Page 21 and 22: Fostering an Attitudinal ShiftThe o
Page 23 and 24: 4.2 Field developmentCommercialisat
Page 25 and 26: Kupe FieldThe offshore Kupe gas-con
Page 27 and 28: Construction of the gas-to-gasoline
Page 29 and 30: The economic impacts of the onshore
Page 31 and 32: STOSShell Todd Oil Services Limited
Page 33 and 34: ITLITL was established in 1988 and
Page 35: Transfield Worley LtdTransfield Wor
Page 39 and 40: Indicative Project Cost Breakdown -
Page 41 and 42: To date New Zealand companies have
Page 43 and 44: Hooker PacificHooker Pacific (“Ho
Page 45 and 46: Kingsway MenswearKingsway Menswear
Page 47 and 48: Directly, the O&G industry accounts
Page 49 and 50: Each project has a different econom
Page 51 and 52: Royalty RegimeNew Zealand’s petro
Page 53 and 54: 6.6 OIL AND GAS - MIDSTREAM ANDDOWN
Page 55 and 56: Methanex produces methanol and owns
Page 57 and 58: 6.7 INFRASTRUCTUREThe concentration
Page 59 and 60: Selected examples of infrastructure
Page 61 and 62: Port TaranakiA report on the econom
Page 63 and 64: Summary of Quantified ImpactsEconom
Page 65: 6.8.1 Contributing to a vibrantgrow
Page 68 and 69:
Helicopter underwater escape traini
Page 70 and 71:
GNS Science, the nation’s prime p
Page 72 and 73:
6.8.9 Investment in the communityEx
Page 74 and 75:
7Economic significance of Taranaki
Page 76 and 77:
8Where to from here?This report sho
Page 78 and 79:
8.4 Think SmartJust as the Governme
Page 80 and 81:
9Appendix A.Other statistics and ec
Page 82 and 83:
New Zealand Company ComplianceTo ma
Page 84:
Taranaki’s development agency9 Ro
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