Kupe Gas Project Helps Secure New Zealand Gas Supply

Kupe Gas Project Helps Secure New Zealand Gas Supply

ASX/Media Release

18 March 2010

Today's official opening of the Kupe Gas Project by the New Zealand Prime Minister, John Key, demonstrates the important role of the project in helping to secure New Zealand's gas supply needs.

Origin and its joint venture partners Genesis Energy, New Zealand Oil and Gas (NZOG), and Mitsui E&P Australia have invested over NZ$1.3 billion during four years developing the Kupe Gas Project.

Kupe Gas Project is now fully operational and is one of New Zealand's most important new infrastructure developments, supplying natural gas to the country's gas transmission system, LPG for national distribution, and light crude oil (condensate) for export to refineries in Australasia and the South Pacific.

Speaking on behalf of the Kupe Gas Project joint venture at the opening in Taranaki today, as operator, Origin Energy's Managing Director, Mr Grant King, said the project fills an important gap in New Zealand's energy supply.

"At peak, it is expected that Kupe Gas Project will produce 10 to 15 per cent of New Zealand's current annual gas demand and 50 per cent of its LPG current demand. Everyone involved in the project should feel proud of the way it has been executed, in particular the commitment to safety, contribution to the national and local economy and excellent support it has received from all the local community," Mr King said.

"At the height of construction, approximately 1,000 people worked on the production station site, providing a significant boost to the local economy. In constructing this facility, more than six million hours of labour was expended while maintaining a very strong record of safety.

"Kupe Gas Project has also created significant economic benefits through the use of operators in the New Zealand supply chain. The project awarded New Zealand companies nearly three quarters of the overall project capital expenditure that the nation had the capacity to tender for. This realised spend in New Zealand of approximately NZ$600 million, or almost half of the project's total capital expenditure.

"I would like to express my gratitude for the exceptional support of our neighbours and the local community. Before the first sod of earth was turned, we worked very hard to ensure all our stakeholders were consulted and their concerns addressed. Without their support we could not have achieved this success.

"The project will continue to deliver significant economic benefits to Taranaki and New Zealand through employment, equipment procurement, associated services such as accommodation and transport, export income and Crown royalties.

"Kupe Gas Project is an excellent example of what partnerships can achieve and Origin is committed to further exploration in New Zealand in order to identify new opportunities which will further assist the nation in meeting its energy needs.

"We would also like to acknowledge the expertise of, and constructive working relationship with, Technip at both the Alliance Board and through the respective project teams," Mr King said.

The Kupe Gas Project is made up of an unmanned offshore platform with three production wells, a 30km raw gas pipeline running from the platform to the shore, an onshore production station near Hawera, light crude storage and export facilities near Port Taranaki in New Plymouth.

The project has been a world-wide effort, involving employees and contractors in Taranaki, Auckland, Wellington and Picton, and others in Aberdeen, Adelaide, Bangkok, Brisbane, Kuala Lumpur, Melbourne, Paris, Perth, and Sydney.

NZOG Chairman Tony Radford said the Kupe field was found by the company when it drilled the first discovery well in 1986.

"This well was followed up by NZOG and its then partners with the drilling of four more wells, all of which discovered oil and gas and together formed the basis for delineation of field reserves and expected performance," Mr Radford said.

"The fact that NZOG drilled the exploration well which made the Kupe discovery, then invested substantial funds into appraisal drilling of the field following that discovery, and that the company continued to foster development of this petroleum resource, including through investment of another $200 million as a 15% partner in the development, are an excellent demonstration of the long term commitment which NZOG has to the petroleum exploration and production business within New Zealand."

Genesis Energy Chief Executive Albert Brantley said the company was committed to ensuring the future supply of electricity and gas to New Zealanders.

"We are proud to be a joint venture partner in the offshore Kupe oil and gas field, which will make a significant contribution to the country's gas needs," Mr Brantley said.

The Kupe Gas Project is now fully operational following the successful commissioning of the project during the past few months.

The Kupe Gas Project is a significant part of the long-term commitment that Origin Energy has made to secure and develop new producing assets in New Zealand.

Over the life of the project, Kupe will produce approximately:
* 254 petajoules of natural gas
* 1.1 million tonnes of LPG
* 14.7 million barrels of light crude oil


Kupe Gas Project participants are:
Origin Energy Resources (Kupe) Limited[1] 50 per cent (Operator)
Genesis Energy 31 per cent
New Zealand Oil & Gas Limited 15 per cent
Mitsui E&P Australia Pty Ltd 4 per cent

For further information please contact:

Media
Lina Melero
General Manager, Corporate Communication
Ph: +61 2 8345 5217
Mobile: +61 427 017 798

Investors
Angus Guthrie
Manager Investor Relations
Ph: +61 2 8345 5558
Mobile: +61 417 864 255

About Origin Energy

Origin Energy is Australasia's leading integrated energy company focused on gas and oil exploration and production, power generation and energy retailing.

Listed in the ASX top 20 the company has approximately 4,000 employees, is a leading producer of gas in eastern Australia, is the largest owner and developer of gas-fired electricity generation in Australia and is a leading wholesaler and retailer of energy. The company services more than 3.5 million electricity, natural gas and LPG customers across Australia, New Zealand and the Pacific. Origin's strategic positioning and portfolio of assets provide flexibility, stability and significant opportunities for growth in the ever changing energy industry. Through Australia Pacific LNG, its 50:50 incorporated joint venture with ConocoPhillips, Origin is developing one of Australia's largest CSG to LNG projects based on Australia's largest CSG reserves base.

In New Zealand, Origin is the major shareholder in Contact Energy, the country's leading integrated energy company, operating geothermal, thermal and hydro generation facilities and servicing electricity, gas and LPG customers across both the North and South islands. Origin also operates several oil and gas projects in New Zealand and is one of the largest holders of petroleum exploration acreage in the country.

Origin has a strong focus on ensuring the sustainability of its operations, is the largest green energy retailer in Australia and has significant investments in renewable energy technologies.

For more information go to www.originenergy.com.au

[1] a wholly owned subsidiary of Origin Energy Limited


SOURCE: Origin Energy