Woodside’s approximate $11 billion bid for leading PNG player Oil Search Ltd

Papua New Guinea’s growing reputation as the new “hot spot” for LNG development in this region has gained further momentum with Woodside’s approximately $11 billion bid for leading PNG player Oil Search Ltd.

Following the hugely successful start-up of the $19 billion PNG LNG project last year, in which Oil Search holds a major interest, the global oil and gas sector has placed a real focus on PNG and its vast gas supplies, its proven reputation for completing major projects, its low cost labour and a supportive government.

And Woodside is not the only international LNG specialist that has made a big move to take up a prime position in the PNG LNG market.

French oil and gas giant Total has recently taken over as operator for what is now shaping up as the next major LNG project to be approved in this region.

The Papua LNG project, in which Oil Search is also a major interest holder, will look to develop the world class Elk and Antelope gas/condensate fields in the Eastern Papuan Basin.

Total and its fellow Papua LNG proponents have already identified locations for the future LNG plant and are hard at work drilling new appraisal wells to confirm future production plans.

Spanish oil and gas powerhouse Repsol has also recently become a key player in another potential Papua New Guinea LNG project through its $15.8 billion acquisition of Canada’s Talisman Energy.

Talisman has spent the past few years building up a portfolio of gas assets in PNG’s highlands which could potentially be combined to provide the feedstock for a third PNG LNG project. Floating LNG has been mentioned as a possible option, as is the potential to sell the gas into the PNG LNG or Papua LNG projects.

With Australia’s LNG projects gradually moving from the construction to the operation phase, the interest from a large section of the service and supply sector is really turning towards PNG.

PNG Chamber of Mines Executive Director, Greg Anderson, recently suggested international interest in PNG from oil and gas services was at an unprecedented level.

Author: Colin Hay