Oil Search said on Tuesday that the PNG LNG Project is progressing a few months ahead of schedule, with first cargo deliveries expected in the middle of 2014. The project cost outlook remains unchanged at US$19 billion.
“The PNG LNG Project achieved a number of major milestones during the first quarter of 2014. These included the start of gas and condensate production from the first two wells on the Hides field and the official handover by the construction contractors of key parts of upstream and downstream infrastructure, including Train 1 at the LNG plant, to the operator, ExxonMobil PNG Limited. Gas flowing from the B Wellpad wells, along with gas from the Kutubu oil fields, is being used for commissioning activities at the Hides Gas Conditioning Plant (HGCP) and at the LNG plant. The condensate, separated from the Hides gas stream at the HGCP, is being transported to the Oil Search-operated Kutubu Central Processing Facility (CPF), where it is being blended with crude oil from our existing oil fields, to be sold as Kutubu Blend for export via the offshore Kumul Marine Terminal,” Peter Botten, Managing Director of Oil Search said.
“At the Hides field, six wells have now been completed and drilling is ongoing at Wellpad G on the final two Hides production wells with Rig 703 and on the produced water disposal (PWD) well with Rig 702. The PWD well, which will be used to reinject any water produced by the Hides production wells, will also help constrain the vertical extent of the hydrocarbon column at the Hides gas field and further define gas volumes.
“Downstream at the LNG plant, operatorship of Train 1 and the associated facilities was transferred to the Project operator on 16 January. At the end of the quarter, construction of Train 2 was substantially complete, with initial testing underway.
“In early March, the operator advised that it had narrowed the window for first LNG deliveries to the middle of 2014. The operator also confirmed that the Project cost outlook remains unchanged from the November 2012 estimate of US$19 billion. During the quarter, further environmental and social studies were undertaken on the potential development of the P’nyang gas field, in preparation for the submission of a development licence application for the field by early 2015. These studies are expected to continue in the second quarter of 2014. Meanwhile, the seismic programme over the Juha field in PDL 9 continued during the quarter,” Botten concluded.
The PNG LNG project is a 6.9 million tonne per annum integrated LNG project operated by Esso Highlands, a subsidiary of Exxon Mobil. The gas will be sourced from the Hides, Angore and Juha gas fields and from associated gas in the Kutubu, Agogo, Moran and Gobe Main oil fields.
LNG World News Staff, April 22, 2014; Image: Oil Search