L&M Energy is beginning a coal seam gas test drilling programme near Kaitangata this month, hoping to find commercial quantities of gas.
L&M managing director, Kent Anson, said the first well to be drilled, Wangaloa-1, would be driven 515m deep and would test the coal seam gas potential from five sub-bituminous coal horizons: Capstick, Jordan, Kai Main, Carson and Shore, which are within the coalfield.
"L&M plans to case and suspend the well as a future production well in order to carry out further testing at a later date pending positive results," Mr Anson said in a market update yesterday.
Being 60km south of Dunedin, Kaitangata was ideally placed to supply power generation to significant agriculture and domestic demand, as well as natural gas for what was a strong local bottled gas market, he said.
The targeted Kaitangata coal seams typically contained up to five sub-bituminous coal seams with individual seam thicknesses up to 15m. Earlier testing revealed some seams could contain more than 3cu m of gas per tonne of coal, at 400m deep.
"This combination of high permeability and gas content has the potential to generate commercially viable gas flows," Mr Anson said.
