P'nyang for XOM train #3 ?

[Tree]

ExxonMobil gains P'nyang licence nod

Bill Lehane 

 16 January 2015 09:59 GMT

Papua New Guinea is to award ExxonMobil a petroleum development licence for the P’nyang gas field under a new memorandum of understanding signed with the US supermajor that could see an extra train added to the liquiefied natural gas project PNG LNG.

ExxonMobil said it plans to begin preparations this year for appraisal drilling at the gas play subject to technical work, permitting and budgeting, and will look to drill the appraisal within two years of gaining the development licence.

The supermajor said that PNG had agreed to award the licence and associated pipeline permits “in order to provide access to the long-term natural gas reserves needed for power generation, and to enable expansion of the PNG LNG project, which could include the development of a possible additional train”.

As Upstream reported in October, the P’nyang field is already home to about 1.5Tcf in gas resources and is considered likely to provide the upside needed for another train at the two-train PNG LNG project subject to further drilling.

The MoU also provided a framework for ExxonMobil to provide up to 20 million cubic feet a day of gas on a 20-year deal to feed power generation plants to improve PNG’s electricity supply.

Some of the supply will be used by PNG LNG to supply interim generation capacity while the remainder will go to a new state-owned power plant set to be built near the LNG plant outside Port Moresby.

[Getitrt2]

Thanks, Tree.

Probably the strongest support yet for that opinion and expectation for PNG LNG train 3. It does not sound like Exxon has any thoughts of getting a piece of Total's interest in E/A through OSH's arbitration. Maybe OSH thinks they could finance the whole thing itself? And that's assuming PNG would even accept such a thing!

[Tusker]

A fine observation. PNGLNG plan indicates to me a simple amplification of the central note of a successful build or expansion is cost. My guess is that Ant/Elk got a very close scrutiny, compared with the extension of existing platform, and PNGLNG decided to go with what they already have. Recall the molecules in the EPB are not the same as WPB. If OSH was hoping to expand it's non concluded "very profitable" right of first refusal, it will become rather limp as there is no on the ground party to receive it.

Of other note; the new engineering designs of VLGC's incorporate re-gassification capacity. Simply, there is no need for shore based capacity for warming the gas for conventional gas line transmission. This will vastly increase the marketable distribution of LNG in the world.

Toot TOT

[ArtM72]

Thanks, Tree. Probably the strongest support yet for that opinion and expectation for PNG LNG train 3. It does not sound like Exxon has any thoughts of getting a piece of Total's interest in E/A through OSH's arbitration. Maybe OSH thinks they could finance the whole thing itself? And that's assuming PNG would even accept such a thing!

I look at the schedule in this release and wonder how committed they might be to this field when appraisal drilling is to be done?  started? in two years.  Two years is a lifetime for those of us following the IOC saga.  In two years we might have another 10 wells drilled (LOL...but we could) with major reserves for sale from locations as close as Wahoo.

Referencing for a moment that thread about the Horizon duster where they had hoped to find 0.6 TCF I am wondering if all of those kilometers of high resolution aerial gravity gradiometry which IOC will be acquiring in the next year will be looking for sub TCF pockets as well as better definition of the numerous multi TCF prospects identified to date.  Regardless, XOM is getting contingency plans in place for whatever happens in the next couple of years.

[Tree]

No disclaimer required for this Reuters piece.

I highlighted a POI.

**********

Jan 16 (Reuters) - ExxonMobil Corp has signed a memorandum of understanding to supply natural gas to power plants in Papua New Guinea in a deal that would give it licences to develop a new gas field that may help expand the company's PNG liquefied natural gas plant.

LNG from Papua New Guinea is seen as the most profitable to develop for supplying Asia compared with rival projects in Australia and North America.

ExxonMobil said on Friday it would begin preparations this year to drill an appraisal well at the P'nyang gas field, co-owned by Oil Search Ltd.

Reserves from P'nyang could "enable expansion of the PNG LNG project, which could include the development of a possible additional train," it said in a statement. The $19-billion PNG LNG project began exporting last year from its first two units.

Under the plan, part of the gas due to go for domestic use will fuel up to 25 megawatts of electricity, or about a fifth of the electricity required to power Port Moresby, the capital of Papua New Guinea, while the government looks for longer-term power generation sources.

The rest of the gas will be used to fuel a new state-owned gas-fired power plant near the PNG LNG plant.

"This agreement enables a reliable long-term supply of natural gas to support Port Moresby's urgent power generation needs," ExxonMobil's PNG managing director, Peter Graham, said in a statement.

[Palm]

Good stuff. Thanks Tree

This is a confirmation that Exxon/OSH are also carrying out their exploration plans and really doesn't show a shift in strategy as much as a confirmation that PNG is still a profitable place to drill. Exxon has said all along that different prospects will be pursued and the ones which make the most sense to develop for expansion will be pursued. We all know from the Horizon PR today that the proof is in the drilling.

[Thylacine-2]

Thanks, Tree. Probably the strongest support yet for that opinion and expectation for PNG LNG train 3. It does not sound like Exxon has any thoughts of getting a piece of Total's interest in E/A through OSH's arbitration. Maybe OSH thinks they could finance the whole thing itself? And that's assuming PNG would even accept such a thing!

I look at the schedule in this release and wonder how committed they might be to this field when appraisal drilling is to be done?  started? in two years.  Two years is a lifetime for those of us following the IOC saga.  In two years we might have another 10 wells drilled (LOL...but we could) with major reserves for sale from locations as close as Wahoo.

Referencing for a moment that thread about the Horizon duster where they had hoped to find 0.6 TCF I am wondering if all of those kilometers of high resolution aerial gravity gradiometry which IOC will be acquiring in the next year will be looking for sub TCF pockets as well as better definition of the numerous multi TCF prospects identified to date.  Regardless, XOM is getting contingency plans in place for whatever happens in the next couple of years.

Right, ART, and that includes keeping themselves in a strong negociating position for any future gas IOC has for sale.

[Putncalls]

Jeez! How about some short NYC speak:
XOM want's it own gas for PNGLNG. PNG gas is still economical. New re-gasification technology makes LNG more valuable.

[Tusker]

XOM & OSH press release this Am. Wonder how quickly DPE/PNG will award the PDL. Perhaps PNG really does want two separate Supers in country.

Cheers

[Palm]

Yep Tucker. PNG LNG seems to be moving ahead and IOC/Total/OSH continue the process of a 2nd LNG plant as low costs rule the day:
http://www.oilsearch.com/Media/docs/1501...4fc1-0.pdf