First Gas’ upgrade of its Ahuroa gas storage facility has helped secure a 15-year contract with Nova Energy for its use.
Under the terms of the agreement, Nova will be able to access 20 terajoules (TJ) per day of injection and extraction capacity and will be able to store up to 4.5 petajoules (PJ) of gas in the Ahuroa reservoir, near Stratford in central Taranaki.
The contract adds additional flexibility to Nova’s gas portfolio, and will support the operation of the company’s new 100 megawatt (MW) peaking power station near New Plymouth, which it expects to commission in mid-2020.
The agreement has been made possible by the upgrade of Ahuroa’s facilities that will increase daily gas injection rates from 27 TJ per day to 65 TJ per day, and daily gas extraction rates from 45 TJ per day to 65 TJ per day.
The increased flexibility provided by Ahuroa will help to manage inter-seasonal and dry/wet year energy variability, helping to support New Zealand’s growing levels of renewable electricity generation.
First Gas Chief Executive Paul Goodeve says the agreement is an important milestone in the life of Ahuroa, which First Gas Group company, Flex Gas, acquired from Contact Energy in October 2018.
“We purchased Ahuroa to grow its ability to support flexible, dispatchable electricity generation and to provide access to new customers. This contract delivers on both of those objectives,” Mr Goodeve said.
The Nova contract will begin on 1 January 2021. Prior to that date, First Gas will continue to market available storage in the Ahuroa facility to third-party users – providing much-needed shorter term flexibility for gas portfolios.
Contact Energy will continue to be a major user of Ahuroa, with rights to use up to 45 TJ per day of injection and extraction capacity once the Ahuroa upgrade project is complete early next year.
Contact’s Chief Generation and Development Officer James Kilty said the company was delighted another long-term customer had committed to supporting the upgraded facility.
“We see gas storage as playing a key role in the transition to a low carbon future,” he said.
Based in New Plymouth, First Gas is New Zealand’s largest owner and operator of gas networks, with more than 2,500km of high pressure gas transmission pipes and about 4,800km of gas distribution pipes in the North Island. The First Gas Group includes New Zealand’s largest LPG retailer Rockgas, and the Ahuroa gas storage facility near Stratford. First Gas’ focus is a safe, reliable supply of gas and LPG to more than 165,000 customers throughout New Zealand.
Ben Gerritsen, First Gas General Manager Commercial and Regulation