Horizon Oil advances pre-FEED work on Western LNG project

Australian exploration and production company, Horizon Oil, said that progress has been made on the pre-FEED for the 1.5 mtpa Western LNG project in Papua New Guinea. 

The company said the project has been identified as a major objective for the new PNG government under its plan to support the economic development.

Advancing the commercialization of its large-scale Western LNG project is one of the key focus points of the company.

“We believe this rotation from being an entirely oil producing company to being predominantly gas producing company is the right strategy to take advantage of a forecast burgeoning market for LNG in Asia in the coming decades,” the company said in a statement.

Horizon Oil is currently conducting production enhancement programs in order to deliver stable cash flow to reduce debt and to advance its Western LNG project.

Commenting on the third quarter activities, Horizon Oil’s CEO, Brent Emmett,  said, “Horizon Oil’s project team made very good progress during the quarter with the commencement of pre-FEED for the three key elements of Western LNG, the upstream processing facilities, the gas and condensate export pipelines to Daru Island and the modular liquefaction facility to be located near Daru.”

He added that the results of this work, including Class IV (-15 percent/+25 percent) cost estimates, are exepcted be completed by the end of this calendar year.

“Following the conclusion of the PNG elections in late August, the new PNG Government released its “25 Point 100 Day Economic Stimulus Plan”, highlighting its intent to drive major new resource projects to strengthen the economy, with the commencement of pre-FEED for Western LNG specifically identified as a key objective,” Emmett said.

The development concept for the Western LNG project has now been defined, with the emphasis being on the selection of a simple scheme with lowest technical and execution risk, maximum use o standard, proven technology and high system reliability, the company said adding that, once the pre-FEED phase is complete, the next step will be to progress to FEED.

Following the execution of a series of transactions undertaken over the past year, the company is now represented in all four fields that will supply the Western LNG project and has a material 28 percent interest in the total resource.

The foundation gas volumes will be provided by the appraised condensate rich gas fields of Elevala/Tingu and Ketu (PRL 21), Stanley (PDL 10) and Ubuntu (PRL 28), with the Puk Puk/Douglas (PRL 40) lean gas fields providing later life gas volumes and a potential hub for other regional gas discoveries such as Kimu (PRL 8).

Western LNG will involve the development of the appraised Western Province gas resources via pipeline to a gas liquefaction facility located near Daru Island and export of LNG and condensate from Daru, with gas and LPG made available for domestic consumers at appropriate points on the pipeline.

Additionally, Horizon Oil, as operator of PRL 21, is in discussions with the PNG National Oil Company, Kumul Petroleum, to investigate an alternative option, which is an open-access pipeline to Port Moresby that will aggregate and facilitate commercialization of several undeveloped gas accumulations in Western Province.