SYDNEY, April 11 Australian-listed oil and gas
producer Oil Search Ltd. (OSH.AX) and partners for its three
gas fields in Papua New Guinea have joined Exxon Mobil Corp.
(XOM.N) to study a potential liquefied natural gas (LNG)
project in the Pacific country.
Papua New Guinea-based Oil Search said in a statement on
Wednesday the study will explore building an LNG plant, using
resources from the Hides, Angore and Juha fields, with
production capacity of 5-6.5 million tonnes per annum.
Oil Search said the study will also kickstart negotiations
with the Papua New Guinea government on financial terms.
About US$60 million is expected to be spent on studies over
the next year, to be shared between operator ExxonMobil
(XOM.N), Oil Search, Santos Ltd. (STO.AX) and Nippon Oil Corp.
Santos said in a separate statement that the study was
expected to be completed by the end of 2007 and first LNG
cargoes were targeted for 2012-2013.
Exxon and its partners shelved a troubled $3.5 billion
Papua New Guinea-to-Australia pipeline project in February to
focus on more profitable gas projects in the country.
Demand for LNG has risen significantly as it is seen as
more environmentally friendly compared with other fuels, such
as oil or coal. The ease of transport has also helped it gain
popularity as customers seek to secure energy without the need
Although several other LNG projects are expected to come
onstream around 2011-2013, including Woodside Petroleum's
(WPL.AX) Pluto and Browse projects in Western Australia,
analysts have said there would be no shortage of demand.