Developments in Coal Seam Gas Exploration

Successful development of coal seam gas (CSG) resources in low-rank coalfields such as the Powder River Basin has raised interest in CSG from low rank coal in New Zealand. Kenham Holdings Limited holds 12 Petroleum Exploration Permits (PEP) covering some of New ZealandÆs low-rank coal and lignite resources and has engaged CRL Energy Limited to assist in the systematic evaluation of the CSG potential of the permits. To date, exploration results from seven New Zealand coalfields reflect differences in coal type, rank, depositional environment and depth of burial between coalfields. Several of the explored coalfields are considered prospective for CSG. One of the most advanced Kenham exploration programmes is in the Hawkdun Coalfield, Central Otago.   The Hawkdun Coalfield contains a single, thick lignite seam with properties that are similar to the Powder River Basin. Preliminary results indicate the Hawkdun Coalfield is prospective for CSG with the potential to contain between 25 and 60 PJ of gas; enough to supply a 30MW power station for ten to 25 years. Further drilling is planned to investigate the economic viability of the Hawkdun Coalfield. The in situ permeability of the lignite, the amount and availability of free gas, gas saturation at depth and market opportunities will determine its economic viability. If initial pumping and production results in the planned exploration programme are promising, the Hawkdun Coalfield will be further developed with additional production drillholes to form a trial production pod.