|Wednesday, 14 March 2012|
INTEROIL chief executive officer Phil Mulacek has welcomed Prime Minister Peter O’Neill’s support of a new Asian gas consortium’s interest in the Gulf LNG project, while he revealed progress underway at its Triceratops-2 well has hit elevated gas readings upon approaching the reef top and could result in InterOil’s biggest discovery yet.
|Triceratops-2 well in PNG's Gulf province. Image courtesy of InterOil.|
The Far East Consortium, comprising of Korean Gas Corporation, Japan Petroleum Exploration Company, and InterOil’s condensate stripping plant project partner Mitsui, recently met with O’Neill to discuss a proposal to acquire a working interest in the InterOil-discovered Elk-Antelope field in Papua New Guinea’s Gulf province.
According to the Post-Courier, O’Neill “expressed appreciation for their interest to invest in the Gulf LNG Project”.
While Mulacek does not typically comment on PNG press reports, as result of the PNG Prime Minister’s statement, he confirmed the news that this consortium is pursuing a stake in the project.
“They are there and they are very interested,” he told PNGIndustryNews.net.
“It’s a strong consortium – it represents the largest single buyer; Kogas in Korea and a lot of Japanese interest so it’s the two largest LNG markets joining together – I feel that’s a positive.”
Three investment banks are continuing a formal process to find a suitable world class operator/partner for Gulf LNG – and while oil major Royal Dutch Shell is expected to have a hat in the ring, there could be a variety of offers.
Mulacek said drilling at the T-2 well is going pretty smoothly and the well is at the top of the targeted reef and confirmed limestone/dolomite reservoir.
A reef-based structure like the Elk and Antelope fields which are technically one field with a fault in between them, Mulacek said the current work involved tying back special casing string and bringing in specialised valves so forward drilling can be done safely and effectively.
“You get unique pressures you have to deal with large reef columns and potentially really great porosities – so it can take a little bit longer than a conventional well to get ready for something like that.”
But he revealed elevated gas readings have already been clocked up, including for C1 compounds (a dry gas category) and C5 compounds (a wet gas category) – “which is really what you want”.
There are plans for a drill stem test at the top of the reservoir once more speciality equipment is in place, including for the use of double downhole deployment valves, an approach InterOil pioneered for upstream work with its reef-based structures in Gulf province.
While it is not yet known when the well could be flared, Mulacek expects a series of information will be unveiled over the next three to five weeks once the DSTs have started up. The initial DST will be done through drill pipe, thereby limiting the actual flow rate.
But at this early stage he said what was estimated on seismic was a little bit conservative (current well about 72 meters higher than prognosis) and he believes T-2 is facing a 2,000-foot thick reservoir.
“Triceratops could be as big or could be even larger than Antelope,” Mulacek said.
While investors and industry observers will continue to wait for results from T-2, InterOil’s focus is that safety is “paramount” while it also wants to ensure a good result with solid data.
“It took us nine months from when we hit the Top of Elk-1  before we could even get into it,” Mulacek said.
InterOil has since evolved its technical approach with its wells which target reef-based structures, which does save time even if the progress still remains slower than wells that drill sandstone targets in PNG.
“It’s a little bit longer than a conventional [well] – but our pays and our volumes of gas per well are bigger and more cost effective than anybody and that’s part of this advanced planning we do and the procedures we follow that we developed,” Mulacek said.
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