17 Oct 2015

$70 million facelift for Pohokura

9:46 pm on 17 October 2015

The timing of Shell's $70 million facelift of its Pohokura natural gas field this summer could not be better for Taranaki engineering contractors.

The Ensco 107 jack-up rig will be located next to Pohokura to accommodate workers, store equipment and offer a heavy lift capability.

The Ensco 107 jack-up rig will be located next to Pohokura to accommodate workers, store equipment and offer a heavy lift capability. Photo: Rob Tucker

Reeling from a downturn in exploration work sparked by a sharp decline in oil prices, engineering companies have laid off dozens of staff over the past year as they wait for the cycle to turn.

Energyworks executive director Dallas Chadwick said the maintenance work at Pohokura had come at the perfect time.

"There's no doubt we are in a downturn and the maintenance work around the place is what's keeping us going at the moment.

"There's good continuity in the maintenance work right now, but Pohokura is a real boost because it's rare, it doesn't happen every year."

The Oil and Gas Specialist Technologies Group represents more than 20 oil and gas support companies in Taranaki.

Its general manager Colin Fromont said the project was significant for the group's members.

"It's hugely important really, both to support that customer - Shell Todd Oil Services because they are a big operator here in Taranaki - and also because as is pretty well known the climate for service companies is pretty tight at the moment."

Shell New Zealand chairman Rob Jager

Shell New Zealand chairman Rob Jager Photo: Supplied

Pohokura, which cost $1 billion to develop, has been operating off the North Taranaki coast for nine years and is New Zealand's largest natural gas field supplying about 40 percent of the market.

Shell New Zealand chairman Rob Jager said the facelift involved routine maintenance of the unmanned Pohokura platform and three wells.

Mr Jager was unwilling to say how much the work was worth, but industry insiders say it could be up to $70 million.

"This is an exciting work programme which will provide substantial contracts for a range of local businesses and work for 250 people," he said.

Mr Jager said the project did not signal a return to the boom times but was a significant job in itself.

"It signals nothing other than it is time to do some work on our Pohokura platform, and it's true there has been a little bit of a downturn in the industry over the past year and we work with our contractors and sub-contractors on an on-going basis and what it will do, is it will certainly increase their workload.

"It's quite a significant job and I would expect it to be seen as a positive for our contractors and sub-contractors."

The Ensco 107 jack-up rig has been moored at Port Taranaki for several months.

The Ensco 107 jack-up rig has been moored at Port Taranaki for several months. Photo: RNZ / Robin Martin

The jack-up rig Ensco 107, which has been moored at Port Taranaki since July at a cost of to its American owners of about $20,000 a week, will be located alongside Pohokura during the project.

Pohokura is New Zealand’s largest natural gas producer.

Pohokura is New Zealand’s largest natural gas producer. Photo: Supplied

It will house workers, store equipment and provide heavy-lift capability during the project, but would not be doing any drilling itself.

Mr Jager said the project had been in the planning stages for more than a year and having the Ensco 107 available provided the best platform possible to do the work in a safe and environmentally sound way.

The exact programme of work was being finalised but would involve water blasting and painting, welding, equipment repair, scaffolding and well maintenance.

Other Taranaki-based contractors to get work on the project include Fitzroy Engineering, WorleyParsons, Baker Hughes, Helicopters New Zealand and Programme Total Marine Services.

Mr Jager said the work was very important to Shell New Zealand because it owned 48 percent of the Pohokura platform and it was a vital part of its asset portfolio.

"It will ensure Pohokura maintains its leading position as New Zealand's largest natural gas producer," he said.

Shell expected work to start before the end of the year and be completed in the first quarter of 2016.

Get the new RNZ app

for ad-free news and current affairs