SYDNEY--ExxonMobil Corp. (XOM) said Monday it has started
drilling for natural gas in a key part of Papua New Guinea to
support its US$15.7 billion PNG LNG project and possibly underpin
its expansion.
Exxon has commenced drilling operations at the Hides natural gas
field, located in the impoverished nation's highlands and expected
to produce about nine trillion cubic feet of natural gas. The
resource will be piped to a liquefied natural gas, or LNG,
processing terminal on the coast, where it will be chilled for
export and loaded on to tankers bound for China, Japan and
Taiwan.
"The start of our drilling program is a key step in meeting our
goal of first LNG deliveries in 2014," said project drilling
manager Jim McDermott.
Australian project partner Oil Search Ltd. (OSH.AU) has said the
Hides drilling program could build enough resources to support a
possible expansion of PNG LNG to three production units from the
currently planned two.
Early in the drilling programme, two separate wells in the
southern and northern sections of the field will be drilled to
establish the location of the gas/water contact and delineate the
size of the Hides gas field. Funds have also been allocated to
evaluate the potential of deeper sands in the Hides structure.
"The aim of the Highlands programme is to evaluate the area's
gas potential and build a resource base to underwrite further gas
development and LNG expansion opportunities," Oil Search said last
month.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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