PNG LNG Project operator ExxonMobil PNG, has announced the addition of an all important as addition of 2.3 trillion cubic feet (tcf) to the existing PNG LNG project fields’ resource base – providing added security for proposed expansion plans for the world class development.
The independent recertification study, undertaken by Netherland Sewell Associates Inc., included all PNG LNG fields and found that the most likely technically recoverable resource is 11.5 tcf, a 25% increase beyond the earlier 9.2 tcf assessment.
“The independent review highlights the exceptional quality of the PNG LNG project resources and the significant increase in resource provides the potential for additional mid or long-term sales,” said Andrew Barry, ExxonMobil PNG managing director.
“The people of Papua New Guinea will continue to benefit from the PNG LNG project for many years to come.
“We remain committed to working with the government, our co-venturers, provincial governors, landowners and communities to maximise PNG LNG resource value and provide long-term, sustainable benefits to the people of Papua New Guinea,” Mr Barry said.
PNG LNG JV member and major PNG oil and gas assets owner Oil Search Ltd said the increase in reserves is a major boost for all participants.
Oil Search CEO, Peter Botten, said it opens ignificant future opportunities as the PNG LNG Project only contracts 1P reserves
“At present, 6.6 MTPA of LNG is sold under long term contract, while the Project is operating sustainably at rates above 8 MTPA,” Mr Botten said.
“The increase in 1P reserves, which equates to 2.8 tcf on a gross basis, will provide the co-venture the potential to explore market opportunities to contract this material additional production, which is currently being sold on the spot market,” he said.
A major contributor to the increase was the Hides field due to completion of development drilling including previously undrilled areas of the field, completion of optimised long term depletion plans and production performance since start up in 2014.
In 2016, PNG LNG produced 7.9 million metric tons, an increase of 14% from the original design specification of 6.9 million metric tons a year. The PNG LNG project is providing reliable long-term supplies of liquefied natural gas to four major customers in Asia as well as spot and short-term supplies to those and other customers.
Most analysts believe a successful conclusion to the currently drilling Muruk well near Hides will add significantly to the updated figures.
The reserves increase will add momentum to discussions on the construction of a new LNG train for the PNG LNG Project, potentially without the need for gas from the Elk-Antelope fields.
Oil Search’s Peter Botten also noted the strengthening Elk-Antelope position in his company’s announcement on its reserves and resources position as at December 31, 2016.
Mr Botten said following the recent successful appraisal campaign at Antelope, Oil Search has reassessed its reservoir models for the Elk-Antelope fields in permit PRL-15.
“This has led to a 254 bcf, or 21%, increase in our share of Elk-Antelope 2C contingent gas resources, to 1,473 bcf, with 13 mmbbl of condensate. On a gross basis, Oil Search’s gas volume of 6.5 tcf raw gas for Elk-Antelope is in line with those recently certified by NSAI (6.1 tcf raw gas) and Gaffney, Cline & Associates (6.9 tcf).
“Together with 2C contingent resources at P’nyang of 1,348 bcf (equivalent to 3.5 tcf dry gas on a gross basis), we hold very significant volumes of undeveloped gas resource, which we believe is more than sufficient to underpin at least a two train LNG expansion,” Mr Botten said.