Exxon Mobil Wants To Expand LNG Project In PNG

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Managing director says project looking for more gas sources

By Jemima Garrett

MELBOURNE, Australia (Radio Australia, Sept. 5, 2013) – Exxon Mobil is moving to expand its $19 billion liquid natural gas plant in Papua New Guinea, even before the project has been completed.

The Port Moresby plant is the largest ever commercial development in PNG and is so big that each of its gas storage tanks are large enough to fit a Boeing 747 inside.

But even before the plant is fully tested, Peter Graham, Managing Director of project operator, Esso Highlands, told Radio Australia's Pacific Beat a major expansion plan is already being looked at.

"We are optimistic and we have a very active program underway to move expansion plans forward as fast as we practically can," he said.

The construction already features two processing trains, used as the plant's liquefaction and purification facilities.

Mr. Graham says it is looking at a number of new gas sources including petroleum company Inter Oil's Elk-Antelope resource, for which negotiations are in progress.

This could provide sufficient gas for expansion to add an extra train.

"It will depend obviously on how much gas there is and that is yet to be defined. I think before any expansion project goes forward based on any resource there is going to need to be a definition of what reserves are available," Mr. Graham said.

David Lennox, Resource Analyst with Sydney-based stockbroking firm Fat Prophets, says the PNG-LNG project is well-placed to take advantage of energy demand in the region with prices likely to stay strong.

"Demand out of Asia is growing quite significantly and that is a result of the events of Fukushima and the nuclear accident there and of course the debate that the world is having on global warming," he said.

Earlier this week, the Exxon subsidiary announced the project is 90 per cent complete and is on track to deliver gas to its customers in the second half of 2014.

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