THE success of the P’nyang South appraisal well and its sidetrack in Papua New Guinea’s Western province has led to speculation a third train of the $US15.7 billion PNG LNG project is a certainty, with discussion even emerging over a possible fourth train.

Oil Search's PNG gas resources

The PNG LNG joint venture's logo

The long-standing plan was to develop a two-train LNG plant for a combined capacity of 6.6 million tonnes per annum from 2014 but considerations were always made to allow for further plant expansion.

Yet operator ExxonMobil has always taken a conservative approach to the project’s possibilities.

In 2008, an independent study it commissioned even found the project would be profitable under a long-term average oil price of $65 a barrel.

A major issue for possible expansion is that key project fields are in the difficult terrain of the Southern Highlands, where it is expensive to operate and sometimes impossible to acquire seismic.

But the recent success at the much lower lying – but near enough – P’nyang South field has changed the investment case.

More figures are yet to be calculated but data so far indicates this future PNG LNG field has a potential vertical gas column of more than 650m.

The goal of proving up at least 2 trillion cubic feet of gas in the field has been satisfied but there is speculation it could be closer to 3Tcf.

In a story for The Australian by former PNGIndustryNews.net columnist Brian Gomez, an “industry source” said the outcome for a third train (another 3.3MMtpa) for PNG LNG had been virtually assured because of the P’nyang South drilling.

The source was also excited about the prospect that development and appraisal drilling next month at the biggest project field of Hides, where gas-water contact was reportedly not determined, would further expand the available gas pool for PNG LNG.

“If all this becomes available, the project will have more than it needs for a third train and on the way to considering a fourth train,” the source reportedly said.

An ExxonMobil spokesperson did not question the comments made in the report.

“Our priority is delivering the project commitments we already have,” the spokesperson told PNGIndustryNews.net.

“However, we routinely evaluate upstream opportunities around the world and as a matter of corporate policy do not comment on commercial matters.”

PNG LNG partners are ExxonMobil (33.2%), Oil Search (29%), the PNG government’s Independent Public Business Corporation (16.6%), Santos (13.5%), Nippon Oil (4.7%), the state-owned Minerals Resource Development Company (2.8%) and Petromin (0.2%).

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