Ahuroa Gas Storage facility update

21 December 2022
Ahuroa Gas Storage facility update

In late 2021, Contact was notified of an unexplained increase in pressure recorded in the
Ahuroa Gas Storage facility (AGS) by the owner and operator, Flexgas. Contact agreed to a
temporary operating regime from February 2022, limiting injection when storage reached
~10PJ.
A joint technical working group was set up to investigate these concerns, assess the
capacity of the asset using historic information, and identify actions that could be taken to
improve its performance.
The technical working group has recently concluded the first stage of studies into the issues.
Contact has now largely concluded its internal review of the findings using an independent
technical expert. It appears that historic operating practices and periods of low operating
pressure exacerbated by reduced gas supply have seen water ingress into the reservoir.
In summary, the experts have concluded:
− The modelled estimate of available storage capacity is currently between 10 and 12
PJ (P-50). Any reservoir modelling assessment is inherently uncertain. These
modelled storage estimates will therefore need to be confirmed through real-world
operation. If confirmed, this would be lower than the maximum storage expectation
of 18PJs estimated on sale in 2018, and potentially lower than the 12PJs Contact
stored within AGS in 2014.
− Secondly, to maintain reservoir pressure to support the 65TJ daily injection and
extraction rate, approximately 4PJs of gas currently stored in AGS and owned by
Contact may only be available for extraction at the end of Contact’s storage contract
in 2033. If this volume is excluded from the available storage capacity, then the
estimated storage capacity is modelled at between 6 and 8PJ (P-50).
The experts have also made several recommendations to increase the available storage
capacity, including operating AGS at higher pressure and replenishing gas drawdown at a
faster rate. If implementation of these measures is successful, experts have identified a
potential increase in the modelled estimated storage available, which could add as much as
3PJs to the available storage capacity over several years.
This current assessment means that the 6.5PJ of gas Contact has stored in AGS includes
around 2.5PJ of immediately accessible gas. When combined with our contracted gas, the
12-month forward gas available to Contact totals 15.1PJs.
Contact has several mitigations available to limit the impact from the reduced capacity at
AGS for winter 2023. These include entering flexible gas contracting arrangements and, if
necessary, acquiring additional gas.
Contact will continue to work with Flexgas to maximise the available operating capacity of
the asset.

1/ MORE INFORMATION:

Investors: Shelley Hollingsworth
Investor Relations and Strategy Manager
shelley.hollingsworth@contactenergy.co.nz
+64 27 227 2429

Media: Louise Wright
Head of Communications and Reputation
louise.wright@contactenergy.co.nz
+64 21 840 313