Energy Minister Gerry Brownlee is enthusiastic about the future of a coal seam gas industry in NZ which he says has the potential to make a “sizeable contribution” to NZ’s energy security, but his enthusiasm is tempered by the analysis of energy consultant Dr Mac Beggs, who says major progress in the industry here may hinge on the discovery of “sweet spots.” Dr Beggs, formerly a senior geologist at GNS, and now director of Lower Hutt-based Geosphere Ltd, defines CSG “sweet spots” as maybe a coincidence of large continuous coal seams, high gas content, enhanced biogenesis (the process which creates methane gas in lower rank coal) and good permeability in the seams.

While there has been a “staggering” level of success in Australia, where about 17,000PJ of CSG has been proven, NZ geology is complex compared with Aust. But a positive factor for the local industry is there are a number of well-resourced CSG companies presently exploring throughout the country. This provided multiple independent approaches, at least one of which could be expected to succeed in establishing a “sweet spot.” Beggs says “once a formula has been found, a CSG play tends to burgeon.” Among those exploring for coal seam gas is Christchurch-based L&M Coal Seam Gas Ltd, a private company, which has an aggressive appraisal programme underway to define an estimated 1200PJ of CSG resources in the North and South Islands.

CEO Kent Anson reports more than 10 wells are planned in its upcoming programme. It holds 6 permits, 4 in Otago-Southland, and the other 2 in the North Island, making it the largest CSG permit holder. The company’s first 5-well pilot at Kaitangata (PEP38219) in South Otago containing an estimated resource potential of 54PJ is still undergoing production testing. A further 2 wells are planned to define the extent of the resource in the estimated 2bn-tonne sub-bituminous coalfield. More pilot wells are planned later this year at the Central Otago lignite field of Hawkdun (PEP38218) which has an estimated resource of 57PJ.

A third series of pilot wells could go into the Ohai permit (PEP38220) in Western Southland which has an estimated resource of 150PJ. Two more exploration wells are targeted for the company’s other Southland permit at Winton where the resource is estimated at 140PJ. In the North Island, L&M’s largest permit is South Waikato (PEP50348) with an estimated resource of 770PJ and over 6bn tonnes of coal in known fields

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