Oil Search confident
The National, Wednesday July 16th, 2014
OIL Search is confident that enough new gas will be found in the country to justify a significant expansion of the project’s processing facilities.
The Australian company is Exxon’s biggest partner with 29% stake in the PNG LNG project.
It said sufficient natural gas probably exists in the country’s highlands to warrant adding at least one refrigeration unit, known as a train, to chill natural gas into liquid so it could be exported to fast-growing markets in Asia.
As reported by the Wall Street Journal, any major boost to the liquefied natural gas produced in the country promises to be a vital new source of profit for Exxon, which was attempting to arrest three years of falling production.
Expansion would prove a windfall for Papua New Guinea’s developing economy.
Chief executive officer Peter Botten said: “By the end of the year, I think we’ll have a pretty good idea as to the size and shape of the Hides field in the highlands.”
A large increase in the amount of LNG pumped into Asia would make the gas market more competitive by creating a new source of supply for buyers in places such as Japan, South Korea and China.
The US$19 billion (K45 billion) project began exporting chilled natural gas in May, putting the impoverished nation into the global energy market.
The project’s two existing trains are capable of producing 6.9 million metric tons of LNG a year, equivalent to about 8% of Japan’s total LNG intake last year.
Exxon’s oil and gas production has fallen since 2010 as the industry generally has struggled to find big deposits in countries that aren’t hostile to foreign investment.
The PNG development is a key part of Exxon’s efforts, along with exploration in Asia and projects in Canada and Russia, to improve performance.
The prospect of adding new refrigeration units to the LNG projects is appealing to producers because costly infrastructure, such as pipelines, roads and storage tanks, has already been installed. Expanding processing is therefore a relatively inexpensive way to boost production.