Gas field ‘likely’ to be independent

By MARK HAIHUIE
THE commercialising of Western gas fields will most likely be done as a standalone project away from PNG LNG Project infrastructure, says Horizon chief executive Brent Emmet.
He told The National that alternatives were considered such as the Western Pipeline proposed by Kumul Petroleum Holdings.
These design options were dropped due to uncertainties on commercial arrangements and possible delays for the project, he said.
“We have considered the alternatives of running our gas into the Western Pipeline Project proposed as an open access pipeline by Kumul Petroleum, and also the possibility of exporting the gas and condensate through the pipelines that ExxonMobil has proposed to develop at the P’nyang field,” Emmet said.
“While these are potentially viable alternatives, we have little certainty as to the commercial terms and timing of access to third-party infrastructure.
“Western LNG will remain our base case concept,” he said.
“A particular concern with producing into the PNG LNG system is that Western Province gas would likely serve as backfill to the extensive PNG LNG gas resources, including P’nyang, thus delaying the impact of Western Province gas commercialisation, potentially by decades.
“We think this delay will be unacceptable to the various stakeholders, particularly local communities, landowners and the provincial government.
“In our view, Western LNG will deliver a large volume of product condensate, domestic gas LNG and LPG, with more certainty and in a shorter timeframe. The infrastructure spine associated with the project, stretching nearly 600km from Kiunga to Daru, will provide, as we discussed earlier, a valuable building block for development in Western province.”
Horizon Oil has a 30 per cent interest in the Western LNG project.
“From a National Government perspective, I would expect that all the construction and ongoing operational activity that comes with a new project in Western will be more attractive than an add-on to an existing project in the possibly distant future,” Emmet said.