PAPUA New Guinea’s major gas resource owners are aiming to present an aligned view on a development plan for a proposed expansion of the country’s LNG production capacity by year end.
Entering Front End Engineering and Design (FEED) in 2018 for a PNG LNG Project expansion and commencing early works for Papua LNG were identified as major objectives for the new PNG Government in its 100 Day Economic Stimulus Plan and Oil Search managing director Peter Botten says all parties have been hard at work on that objective.
“During the quarter, work progressed on the next phase of LNG expansion in PNG. Engineering studies are being carried out to evaluate a narrow range of potential development options for the Elk-Antelope and P’nyang gas resources,” Mr Botten said.
He said the key focus of these studies is on the configuration and capacity of LNG trains to be built, field phasing and the optimisation of the train configuration in terms of operating performance, capital expenditure and operating costs.
“Other areas of discussion which are taking place between ExxonMobil, Total and Oil Search include determining the optimal commercial model for asset ownership and financing, the approach to marketing the LNG and alignment on future exploration acreage and activities.
“The joint venture partners are aiming to present an aligned view on the development plan to the new Government in the fourth quarter of 2017, which will enable fiscal terms to be established prior to FEED entry, which is planned for as early as possible in 2018,” Mr Botten said.
Drilling programme to support LNG pans
The various JVs with high profile gas opportunities are also working hard to test the potential to add to PNG’s already significant gas resources.
Mr Botten said an extensive exploration, appraisal and development programme, comprising a range of oil and gas wells and seismic acquisition, is planned over the next few years.
“This programme has multiple objectives, including mitigating oil production decline from our mature oil fields, appraising existing discovered gas fields, to create optionality for LNG expansion and other commercialisation options, as well as exploring both known and frontier hydrocarbon provinces in PNG for reserve growth,” Mr Botten said.
Key wells include the soon to spud P’nyang South-2 well.
Mr Botten said that while the primary aim of the well is to support certification of an increase in the 1C resource, following remapping of reprocessed seismic data, Oil Search believes that there is the potential for a significant increase in 2C resources, which will be tested by the well.
P’nyang South-2 will take approximately three months to drill, with recertification of the resource by an independent expert expected to commence in the first quarter of 2018.
Mr Botten said site preparations are underway for an appraisal well on the exciting Muruk gas discovery, with the well expected to commence drilling towards the end of the first quarter of 2018. “While Oil Search believes there is already sufficient gas in P’nyang and Elk-Antelope to underpin an 8 MTPA expansion, given its proximity to Hides infrastructure, Muruk represents a potential low cost development.
“The fairway between P’nyang, Muruk and Hides has proven gas reservoir quality and gas charge and Oil Search believes that, given exploration and appraisal success in this region, there may be potential for further discoveries and development that could underpin additional LNG capacity.”
Mr Botten said appraisal of the Kimu and Barikewa discoveries, which is expected to commence in early 2018, will test the upside resource base of these fields and will help in the selection and optimisation of the most appropriate gas commercialisation pathway.
“Several development and appraisal targets and near field exploration prospects have been identified in and around our producing oil fields. These targets have the potential to add material oil resources and are commercially very attractive given the proximity to infrastructure,” he said.