It's "all on" for the $1 billion development of Taranaki's Pohokura gas discovery.
Associate Energy Minister Harry Duynhoven yesterday announced the granting of a mining permit that allows the field's owners to immediately enter into commercial contracts for the construction phase.
Pohokura will be New Zealand's most significant petroleum development since the now-declining Maui field came into production in 1979.
"The way is now clear for construction to commence," said Shell NZ exploration and production manager Ajit Bansal. Shell companies hold a 48 per cent share in the field.
Pohokura field operator is Shell Todd Oil Services, and general manager Paul Zealand said the first major contract for the development project would be signed early next week.
"It's now all on.
"This project will involve five major construction and drilling contracts, and we expect them all to be awarded within the next few weeks," he said.
Several hundred workers will be required for the project, involving construction and installation of two offshore production platforms, construction of a large production station at Motunui, and the laying of seabed and land pipelines.
Duynhoven said Pohokura would be of enormous benefit to the country.
"Pohokura has been a critical component of New Zealand's energy forecasting for some time, and I am delighted to see this project now proceeding," he said.
"While Pohokura is not a complete solution to our energy needs, it has an important role to play in our wider strategy for investment in exploration in New Zealand."
The awarding of the mining permit follows Shell making a "final investment decision" on the project this year.
It also follows the pre-sale of some Pohokura gas.
The production of the first gas from the field is scheduled for mid-2006.
Shell's Bansal said the permit was partly the result of significant co-operation from the Ministry of Economic Development, which recognised the need for urgency in considering the application.
The Pohokura field, discovered in February 2000, is immediately off the coast at Motunui.
Initial production of gas is expected to be about 50 petajoules a year, representing roughly 25 per cent of New Zealand's total gas production.
In addition, the field is expected to initially produce three million barrels of condensate a year, representing one-third of the country's total annual condensate production.
The Pohokura licence is the second mining licence granted this year, the first being for the Kupe gas and oil field off South Taranaki.