The Wall Street Journal: Shell NZ Sells Pohokura Gas To Contact,Genesis, Multi Gas

DOW JONES NEWSWIRES

May 21, 2004 2:57 a.m.

WELLINGTON -- Shell New Zealand Ltd., a unit of Royal Dutch/Shell (RD), said Friday it has signed long-term contracts to supply three companies with gas from the offshore Pohokura field.

The contracts with electricity generator and retailer Contact Energy Ltd. (CEN.NZ), state-owned Genesis Power Ltd., and Multi Gas NZ Ltd. come into effect when the field starts production in mid-2006 and run until 2012 or longer, Shell said in a statement.

Shell owns 48% of the Pohokura field, which is offshore Taranaki on the west coast of the North Island. OMV NZ Ltd., a unit of Austria's OMV Aktiengesellschaft (OMV.VI), and local energy investor Todd Ltd. each own 26%.

The field's reserves are estimated around 900 billion cubic feet of gas.

Shell New Zealand's commercial manager Ajit Bansal said the sale of the gas is a "milestone" in the development of Pohokura.

"Shell is committed to getting Pohokura on-stream as promptly as possible to contribute to attaining further surety of gas supply for New Zealand into the future," Bansal said.

The giant Maui gas field, which supplies about 70% of New Zealand's gas, is expected to run dry in 2007.

Contact Energy in a separate statement said the agreement with Shell provides it with much greater certainty about fuel supplies for its gas-fired power stations.

Contact earlier this month agreed to buy OMV's share of Pohokura gas for five years, which it said would be sufficient to power about 300,000 homes.

-By Stephen Wright, Dow Jones Newswires; 64-4-471-5990; stephen.wright@dowjones.com

-Edited by Tracy Gan