PNG LNG getting more gas thanks to new project coming online

Exploration & Production

Australia’s energy giant Santos has confirmed the completion of a two-well project forming part of an integrated development to commercialize the gas resources of Papua New Guinea.

Illustration; Source: PGN LNG

According to the Australian firm, the two wells that have been commissioned and connected as part of the Angore development are expected to supply up to 350 million standard cubic feet of gas per day to sustain production at the PNG LNG project. The completion of this development – which the firm says has performed strongly since the project was brought online – is anticipated to unlock one trillion cubic feet (tcf), or approximately 28 billion cubic meters (cbm), of natural gas resources to supply PNG LNG for years to come.

“The startup of Angore is one of a number of PNG highlights in 2024 for Santos and our joint venture partners – ExxonMobil, Kumul Petroleum Holdings, Mineral Resources Development Company and JX Nippon.The supply of associated gas from Kutubu through optimisation of the Central Processing Facility is also exceeding expectations with 16 billion cubic feet of gas accelerated so far this year,” said Santos Managing Director and Chief Executive Officer (CEO), Kevin Gallagher

“Associated gas from Agogo and Moran could deliver at least another 125 mmscf per day and we are working to make this development final investment decision-ready by 2026. In addition, we are currently drilling the Hides Footwall well, an exploration well that, if successful, could deliver up to another 160 mmscf per day. Fields such as P’nyang, Muruk and Juha also remain in the queue to sustain PNG LNG production over the long term.”

PGN LNG is an integrated development in Papua New Guinea. According to its operator and 33.2% interest holder ExxonMobil, the operations can produce more than 8.3 million tons of LNG annually and are estimated to exceed 11 trillion cubic feet of LNG over its lifetime. The remaining shares in the project are held by Kumul Petroleum (19.4%), Santos (39.9%), JX Nippon Oil & Gas Exploration (4.7%), and Mineral Resources Development Company (MRDC), with 2.8%.

Earlier this month, Kumul Petroleum finalized the acquisition of a 2.6% interest in the development from Santos. This follows a binding sales agreement from September 2023 and around $250 million paid into escrow with Santos by Kumul in January 2024 as part payment of the purchase price.

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The project includes gas production and processing facilities with 700 kilometers of onshore and offshore pipeline connecting the gas conditioning plant in Hides and a liquefaction and storage facility near Port Moresby.

“This is a great position for Santos and PNG LNG to be in – we are spoilt for choice with no shortage of healthy upstream development options to keep our LNG infrastructure full. At the same time, front end engineering for Papua LNG is ongoing, again with a prolific gas resource base in PNG’s Eastern Highlands Province that is relatively close to LNG production and export infrastructure,” added Santos CEO.

“The nearby Gulf Province is also highly prospective with exciting prospects such as Wildebeest still to be drilled. Santos and our joint venture partners have a world-class gas resource and LNG infrastructure position in PNG, which is well placed to continue to reliably supply our customers in Asia out to 2040 and beyond.”

Santos says the project has supplied more than 83 million tonnes of LNG to Asian customers, including four long-term offtakers – CPC, JERA, Osaka Gas, and Sinopec, since the start of production in April 2014.
With an investment value of over $19 billion, PGN LNG celebrated its tenth year of production in 2024, “routinely” surpassing its nameplate capacity of 6.9 million tonnes per annum by 30%. Described as being in the top quartile of LNG producers globally, the project is said to have a relatively low greenhouse gas emissions intensity.