Coal Seam Gas (CSG) is a new and developing source of natural gas worldwide. Recent changes in the New Zealand energy scene have prompted renewed interest in activity in the area of CSG exploration. CSG is essentially natural gas, largely comprised of methane. It is suitable for the same uses as conventional natural gas. The potential of New Zealand’s coals to produce CSG has been recognised for some time, and exploration work has been carried out since the mid 1980s. L&M Coal Seam Gas, recognising the potential for CSG in New Zealand, initiated what is the largest-ever assessment of New Zealand’s coal seam gas potential.

Currently there are 16 coal seam gas permits, of which L&M Energy are the largest individual permit holder, with 4.

North Island:

PEP50348, PEP51244

South Island:

PEP38219, PEP38220

 Exploration activity is increasing, with 8 exploration companies now active within the sector.

To date, L&M Energy has drilled 52 exploration wells, conducted multiple 2D seismic surveys to ascertain prospectivity, conducted production testing across three permit areas, commenced the first pilot project and have Gas Reserves Certification underway.  We have carried out a very detailed evaluation of a number of areas since 2001 with encouraging results. Our current assessment has indicated that the permits have the potential to contain an energy resource in the order of 1,100 petajoules. We are currently undertaking economic and environmental studies on our permit areas.

What is Coal Seam Gas used for?

The commercialisation opportunities are high with L&M Energy's permits well placed to service existing facilities and end users. New Zealand is home to some of the largest dairy plants in the world which would benefit, and many end users are using coal as an energy source. There is a huge potential for coal displacement through cogeneration.