Friday, November 19, 2010

Gas project eyes more fuel output

ExxonMobil, partners: Initial production could be larger


EXXONMOBIL Corp and its partners in the PNG LNG project are likely to produce more fuel than they initially expected during the first phase of the project, online publication Bloomberg Businessweek has quoted analysts as saying, The National reports.

The venture initially may produce 6.9 million metric tonnes of LNG from two units, up from the 6.6 million tonnes previously projected, according to Credit Suisse and Citigroup Inc analysts who cover Exxon’s partner, Oil Search Ltd.

The Hides field drilling campaign next year is likely to underpin an expansion of the project to a third processing unit, Sydney-based Credit Suisse analyst Sandra McCullagh said after a visit to the project site.

A final investment decision on the next stage may occur in 2012, she said.

ExxonMobil and partners approved the development of the project almost a year ago.

The venture may double the size of Papua New Guinea’s economy, Port Moresby-based Oil Search has said.

Government projections released during the handing down of the 2011 budget this week say that the economic growth will be over 20% from 2015, the first full year of export.

First exports are due in 2014, barring any disruptions. A third plant may begin in 2016, McCullagh said.

“We are increasingly confident Oil Search has additional growth opportunities that may boost earnings,” she said.

Oil Search rose 2.3% to A$6.67 at the 4.10p.m. close in Sydney yesterday, compared with a 0.3% increase for the benchmark S&P/ASX 200 Index.

An additional unit, or train, producing 3.5 million tonnes of LNG annually, may cost about US$5 billion, Citigroup’s Mark Greenwood in Sydney wrote in his report.



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