More gas find may support third train

Business, Main Stories

The National – Friday, December 17, 2010

THE possibility of finding more natural gas in PNG could lead to a third production line for ExxonMobil’s LNG project in the country, research institution Sanford Bernstein & Co said.
The Hides gas areas might  contain 50% additional deposits compared with currently booked reserves, Bernstein reported yesterday.
“Exxon and Oil Search Ltd plan to produce 6.6 million metric tonnes a year of the frozen fuel in 2014 from two production lines at a US$15 billion LNG venture,” it said.
Hong Kong-based analysts Neil Beveridge and Angus Chan said the main trunk line for PNG LNG had the capacity to accommodate a third and possible fourth LNG train at a low cost, making the marginal return on LNG expansion extremely attractive.
Oil Search and InterOil Corp are among those planning to build LNG projects in Papua New Guinea to supply growing Asian economies.
“The country remains under-explored and under-appraised, and the possibility of multi-trillion cubic feet discoveries, which could underpin future LNG projects, remains high,” Bernstein said.
Oil Search wants to find reserves to support two more processing units at the Exxon-operated LNG venture, it said last April.
The analysts gave Oil Search an “outperform” rating and increased the share-price target to A$8.50 from A$8.
Oil Search advanced 1.2% to A$7.01 in Sydney trading yesterday, compared with a 0.1% increase for the benchmark S&P/ASX 200 Index.