Metgasco Considers a Floating LNG Project, Signs MOU with FLEX LNG (Australia)

Metgasco has commenced feasibility studies into the delivery of gas to liquefied natural gas (LNG) export markets.

Metgasco intends to evaluate the commercial, environmental and technical feasibility of a number of export LNG options. If this review determines that this commercialisation option has merit and is feasible Metgasco will select a preferred LNG project option in 2011.

To this end, Metgasco has entered into a Memorandum of Understanding (MOU) with FLEX LNG Ltd to evaluate the feasibility of an export LNG project located offshore. Over the next few months Metgasco and FLEX LNG will assess whether a Floating LNG project is a viable proposition to monetise gas from Metgasco’s onshore acreage in the Clarence Moreton Basin in New South Wales.

Unlike other Australian coal seam gas projects, Metgasco’s resources are located close to the coast, making floating LNG a commercial possibility. “We believe that the development of export market opportunities for gas from the Clarence Moreton basin will bring significant economic and employment benefits to NSW.

We are pleased to be working with FLEX LNG, one of the most innovative companies operating globally in the global floating LNG industry.” said David Johnson, the Managing Director of Metgasco. Metgasco currently has 2,239 PJ (3P) of independently certified reserves in PEL 16 (100% owned) and has recently commenced work to delineate coal seam gas reserves in its other tenements (PEL 13 and PEL 426) which are 100% owned by Metgasco.

The Company has developed an internal prospective resource estimate of approximately 14 Tcf of coal seam gas in place in its tenements. Additionally, Metgasco has begun to delineate the conventional gas supply potential of the Clarence Moreton Basin.

Metgasco has recently made its first conventional gas discovery in the Kingfisher gas field and has identified an exciting portfolio of conventional leads and prospects to be evaluated. Metgasco has recently concluded a review of the coal seam and conventional gas supply capabilities of the tenements it operates in northern NSW (PEL 16, PEL 13 and PEL 426) which indicates that the gas resources present within these areas are sufficient to supply an LNG plant of up to 3 million tonnes per annum over a 20 year gas supply contract term.

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Source: Metgasco, September 27, 2010;