Dunedin and Invercargill have both been courting big
oil companies in recent years for the chance of a
billion-dollar bonanza from potential gas deposits in the Great
South Basin. The Star looks at both centres to see who might
win the ultimate prize - the base for southern gas
Port Otago's deep-water harbour is an advantage touted by
local business leaders attempting to court fossil fuel
giants but Invercargill's SouthPort has commissioned a
study comparing the two ports as part of its bid. Photo by
Insiders believe Dunedin's proximity to promising gas fields
in the Great South Basin should see it become a base for any
largescale production - but it is not a done deal yet.
Further south, the Southland Energy Consortium of 193
companies has been focused on the issue for the past seven
years, with some even taking on work off-shore to gain
Shell New Zealand chairman Rob Jager said no decision had
been made on where to set up a base should exploration -
scheduled to take place in two years - lead to full
Anadarko will use Dunedin as a base during its exploration,
which begins in a few weeks but, if exploration is
successful, full production will not begin for five to 10
Venture Southland manager Steve Canny said distance was a
major factor in choosing a base but not the only one.
He said if the best gas deposits were found at the southern
end of the prospecting area, Invercargill could make a more
Southland had a port with generous ''lay off'' facilities
(space for long-term storage), the third longest airport
runway in the country, quality accommodation and a
co-ordinated manufacturing sector, Mr Canny said.
He said many Southland companies had been getting involved in
oil and gas projects in Taranaki and overseas to gain the
skills to support the industry in the south.
SouthPort New Zealand in Bluff has been pushing its case
strongly with the oil and gas companies, highlighting its
modern facilities and ''lay-off'' space for the massive
quantity of gear required.
South Port NZ chief executive Mark O'Connor confirmed a study
comparing South Port with Port Otago had been done by the
consortium but he would not provide it to The Star.
''We would rather promote those advantages directly to the
Mr Canny said a gas industry in the lower south would benefit
both regions and it was important local engineers and support
industries were up to speed on what was required.
''It doesn't matter how aware of the opportunity they are it
won't exist unless they have certification and skills that
Mr Jager said Taranaki's economy had increased 46.9% between
2007 and 2010, largely due to oil and gas production.
Dunedin City Council's economic development unit manager Des
Adamson said even if processing was done on factory ships
off-shore, up to 1000 local workers would still be needed.
He said Shell and Anadarko had done their homework and were
''well aware of the capability that exists in Dunedin and
''Generally speaking they will go to the port that is the
The DCC development unit, local businesses and the port had
done a lot of work determining the requirements of the large
''When was the last time we had an opportunity like this in
the city?'' Mr Adamson said.
Factors in Dunedin's favour included the port, marine and
heavy engineering industries, regular flights from Dunedin to
Australia and a tertiary-level hospital, Mr Adamson said.
Port Otago commercial manager Peter Brown said Port Otago was
the deepest container port in the country and could easily
cater for the ships used in the oil and gas sector.
The port had more than 20ha of lay-off space and had
identified areas that could be used for storage by an
off-shore gas industry.
Mayor Dave Cull said the DCC had been preparing for oil and
gas exploration for as long as Invercargill but there were
still a lot of unknowns.
Re-zoning harbourside areas had been scaled back to make sure
there was enough space for the energy companies to set up
there if required.
''What Shell particularly have said - they were at pains to
say - don't go making any plans or expecting any big changes
or booms for a while,'' he said.
He said it would not be wise of any council to invest large
amounts of money without knowing what was needed and where.
Otago Chamber of Commerce chief executive John Christie said
Dunedin was well-placed to take advantage of any economic
opportunities from gas exploration.
He did not want to get into an ''us-against-them type of
situation'' because both regions would benefit from the