underground gas storage, page-2

Great find Gobris !

I went to Contact Energy website to find some more inf, and found this info in their A/Reports.

YOU CAN SEE THAT THE CONTACT ENERGY UGS LOOKS TO BE MUCH SMALLER THAN THE MOS PROJECT - C/E APPEARS TO HAVE 10-15PJ OF WORKING GAS - WHEREAS MOS WILL HAVE 75PJ !

Contact Energy 2009 A/R:
Flexible low-cost legacy Maui gas supply arrangements have now expired (although Contact still retains
further ongoing rights to other Maui gas). Current gas supply contracts have relatively flat and fixed daily
take requirements, which constrain the ability of gas-fired power stations to adjust their output in response
to fluctuating hydro inflows. During the second half of this financial year the impact of inflexible and high
priced gas began to impact the operation of Contact’s portfolio with the gas-fired plant operating at times
when prices were insufficient to cover the variable costs of operation.

Contact has implemented a series of strategies to help to mitigate the impact of transmission system
constraints and gas supply inflexibility. These include:
• In 2008, Contact acquired the rights to the largely depleted Ahuroa gas reservoir to convert the field into an
underground gas storage facility. Contact commenced injecting gas into the Ahuroa field in December 2008
and a total of 5.6 petajoules (PJ) (excluding LPG) is now held in the reservoir. Although the gas storage
project is not expected to be fully operational until 2010, the storage facility has already provided Contact
with a valuable source of fuel flexibility by providing an ability to inject and store ‘must-take’ gas during the
low demand and high hydro inflow summer months. With the addition of a more powerful compressor
during September 2009 the daily volume capable of being injected will increase.

While the construction of the Ahuroa gas storage and Stratford peaker projects are on schedule for completion in
mid 2010, Contact will have limited ability to manage gas inflexibility during the current financial year (although
Contact is continuing to inject gas into Ahuroa to build up the cushion gas). Ahuroa gas storage, together with the
Stratford gas-fired peakers, will make a material difference to Contact’s ability to manage and leverage wholesale
price volatility.

Extract from Contact Energy 2008 A/R