juniors target western png condensates project

...Plans for a gas condensates project in western Papua New Guinea are taking shape after Canada’s Eaglewood Energy said it had been offered licences for a venture in the Western Province that would involve two junior Australian explorers.

The project, with Horizon Oil, Kina Petroleum and several overseas players, would entail a gas condensate plant and a pipeline to a site on the Fly River, from where product would be shipped to buyers.

The Toronto-listed company is working with international commodity trader Trafigura on how to jointly finance and own the pipeline and processing plant. Other owners would include the PNG government, landowner companies, shareholders in the owners of the gas resources and infrastructure funds, said Eaglewood in a statement released overnight Australian time.

The proposal for the gas project is separate to the $US19 billion ($21 billion) liquefied natural gas project led by ExxonMobil, which is due to start production this year, and to the InterOil-led Elk-Antelope gas venture, which Oil Search has just bought into. The Western Province fields lie to the south-west of the Hides field that will supply LNG to PNG and to the north-west of Elk-Antelope.

Under the licences offered to Eaglewood, the Alberta-based company has the right to build a condensates processing plant that would take gas from the Ubuntu discovery in the PRL28 permit, owned by Eaglewood, Talisman Energy and Mitsubishi, and from the Elevala, Tingu and Ketu discoveries in the PRL21 permit held by Horizon, Talisman, Mitsubishi and Kina Petroleum.

Eaglewood chief executive Brad Hurtubise said these were the first such licences to be awarded in the Western Province of PNG, “and as such they are a significant milestone as the Western Province transitions to becoming the next petroleum producing province in Papua New Guinea”.

The transaction ‘validates the Pacific LNG strategy’


The final award of the licences is still subject to a project agreement being settled between Eaglewood and the PNG government.

Eaglewood’s project would involve only the liquids from the fields in the Western Province, and plans for the commercialisation of the gas resources in those discoveries are less advanced. Several of the companies are in parallel working on longer-term plans to aggregate gas resources for a potential mid-scale LNG project in the province, which would be separate to the LNG project to the east.