|Monday, 25 February 2013|
THE PNG LNG project will get enough gas for a third train either through more exploration of the major Hides field or from third parties in PNG, according to Santos chief executive officer David Knox.
|Santos chief executive officer David Knox|
Last year, Oil Search flagged that the P’nyang field it shares with project operator ExxonMobil in PNG’s Western Province might end up being the foundation resource for a much-vaunted third train.
But there are other possibilities. In an earnings call, Knox discussed some of the potential sources for additional gas, starting with the project’s Hides field in the Southern Highlands region.
“The principle one is the Hides field itself and we’re about to enter the reservoir there with one of the first wells of the new campaign,” he said.
“The results from those wells will be important, and potentially the Hides field itself will be bigger. There’s also another field beneath Hides called Hides Deep which has never been drilled.
“So that’s a really good exploration prospect … those are two really important aspects for us as we go forward to the third train.”
The existing two-train 6.9 million tonnes per annum scope already offers strong returns, with this perception undented by a 21% capital expenditure blowout to $US19 billion in November.
But the underway infrastructure development always factored in a possible expansion and Knox seems to be the most vocal advocate so far.
“From my perspective, I absolutely welcome the third train. This makes the project bigger, the economic value higher, and we’ll see what the mix of gas that fills it will be.
“As I said, it could come from a combination of Hides, Hides Deep and third parties and, of course, we’d be a major participant because our ownership comes from the ownership of the Hides field.
“Let’s see how this plays out, but I absolutely support getting a third train up as soon as possible.”
With first exports targeting 2014, a third train would lift total capacity to 10.35MMtpa under the existing train designs.
Possible third-party considerations in PNG include New York-listed InterOil’s large gas finds in Gulf Province with InterOil holding commercialisation talks with various parties for more than a year.
Oil Search and French supermajor Total SA will also drill for offshore gas in the Gulf of Papua in the coming months.
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