PNG LNG gets resource boost

ExxonMobil PNG, a unit of the US-based energy giant and operator of the Papua New Guinea LNG joint venture, said Thursday it has added 2.3 trillion cubic feet (Tcf) to the existing LNG project fields’ resource base.

The resource addition follows an independent review by Netherland Sewell Associates.

The recertification study, which included all PNG LNG fields, found that the most likely technically recoverable resource is 11.5 Tcf, a 25 percent 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.

A significant 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, ExxonMobil PNG said.

In 2016, PNG LNG produced 7.9 million metric tons, an increase of 14 percent from the original design specification of 6.9 million metric tons a year.

The PNG LNG project is providing 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.

In a separate statement, Oil Search’s Managing Director, Peter Botten said the increase in proved gas reserves at the PNG LNG project “is particularly significant for Oil Search and our coventures, as the 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. 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,” Botten said.

Besides ExxonMobil and Oil Search, other JV participants in the PNG LNG project are Santos, National Petroleum Company of PNG, JX Nippon Oil and Gas Exploration, Mineral Resources Development Company, and Petromin PNG Holdings.