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Here's another article on the subject from Keith Jackson & Friends -- PNG Attitude: http://asopa.typepad.com/asopa_people/20...s-lng.html
The incentives for an XOM deal with IOC have ratcheted up.
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ROSS KELLY | Market Watch
PLANS FOR A POSSIBLE EXPANSION of ExxonMobil Corp's $15.7 billion PNG LNG project in Papua New Guinea suffered a slight setback after an exploration well failed to discover any natural gas.
The Trapia-1 well did not intersect any prospective reservoir intervals before reaching its total depth of 3,800 meters, the US company's joint venture partner Oil Search Ltd said in a statement this afternoon.
Hopes that the partners will find enough natural gas to expand the project to three LNG production units from the two currently under construction were recently buoyed by a large gas discovery at the P'nyang prospect.
The venture is also exploring for more gas at the Hides prospect and analysts remain optimistic that a third production unit, or train, will eventually be constructed.
In a note Tuesday, Commonwealth Bank of Australia analyst Luke Smith said the Trapia-1 well was high risk and the market's focus is on the Hides development well as that field has the potential to contain more than 10 trillion cubic feet of natural gas resources--enough to support at least a third train.
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But JFT!! This drilling was aimed at underpinning third PNG train!! Now what? Guess that $100,000 sub sea 'T' was cheap insurance, huh.
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Exploration drilling aimed at underpinning third PNG train
By Russell Searancke 02 August 2012 22:59 GMT
ExxonMobil said its current exploration drilling in Papua New Guinea is designed to provide reserves for a third train at its PNG liquefied natural gas project, writes Russell Searancke.
The company is currently drilling the Trapia-1 exploration well, which is the second of what PNG LNG co-venturer Oil Search calls “the Highlands gas maturation programme”.
ExxonMobil this week said the exploration activity was “designed to support expansion studies for a third train” at PNG LNG.
“We are certainly studying the opportunity for a third train,” said an ExxonMobil spokesman, “and the positive news is we’re having exploration success this year in drilling some wells and we have an active exploration programme ongoing with a lot of additional acreage that we have available to us.” The first well was called P’nyang South-1 and was a huge success, hitting a larger than anticipated gas column of 184 metres.
A sidetrack to define the gas-water contact more than doubled the gas column, and so the co-owners believe the field’s total gas column could be 650 metres.
The second well, Trapia-1, is targeting a large structure to the east of the Hides and Angore fields, which are feedstock for the first two PNG LNG trains.
The well is expected to reach target depth late in the third quarter of 2012, said Oil Search.
The project owners are also drilling the first of multiple development wells on the Hides field amid anticipation of a major reserves boost at Hides.
The two-year campaign is targeting the drilling of at least 10 wells.
The PNG LNG project is based on a two-train processing plant that will produce a total of 6.6 million tonnes per annum of LNG from 2014.
The owners are ExxonMobil with a 33.2% stake, Oil Search on 29%, PNG government company Independent Public Business Corporation with 16.6%, Santos on 13.5%, Nippon Oil on 4.7%, PNG landowner company Mineral Resources Development Company on 2.8% and national oil company Petromin with 0.2%.
