New record breaking gas flow in PNG

Updated September 8, 2008 16:21:43

Papua New Guinea has a new record breaking gas flow. PNG's Prime Minister Sir Michael Somare opened the valves for the latest test-well at the Interoil site in Gulf province. Once opened, it produced gas at a flow rate of 105 million cubic feet per day.

Presenter: Jemima Garrett
Speaker: Phil Mulacek, Interoil's Managing Director

GARRETT: Papua New Guinea is on the brink of establishing a massive new liquid natural gas industry with two huge joint ventures vying to be the first to set up multi-billion dollar LNG processing plants.

At present the ExxonMobil Oil search project is slightly ahead but this latest news from Interoil means the Interoil Merrell Lynch project known as Liquid Niuguini Gas is a serious contender.

Interoil is already known to have quantities of gas at its Elk gas bearing structure in PNG's Gulf province.

Phil Mulacek, Interoil's Managing Director says this new flow is the first to indicate what is possible from its adjacent Antelope structure.

MULACEK: It's very significant. It validated that the low end of the wedge, if you think of it as a wedge, and sort of a dirtiest section of a reservoir that we had greater mono-gas. It flowed at record rates, which is deliverability, which improves the economics for LNG and underpins more volume, because you already know that the top of the pyramid which is structurally about 400-500 metres higher will be full, because with the lower end and the lower side of the reservoir. And for us it is sort of a confirmation of a second major new structure on trend.

GARRETT: Interoil Managing Director, Phil Mulacek.

This new well has thrown up the intriguing possibility that Interoil's Elk and Antelope gas bearing structures are joined, creating a single massive reservoir.

Interoil's planned LNG processing plant is already scheduled to create 5000 jobs in the construction phase and add 15-per cent to PNG's gross domestic product.

Phil Mulacek says this latest find has put paid to doubters who suggested Interoil did not have enough gas to supply even a one train processing plant.

MULACEK: The analogue structure could be as big as anything in PNG or the biggest and we won't know that 100 per cent until this next well is drilled, may be a couple more, but the issues that already is enough for the first train. What we're doing now is understanding do we have two trains in one single reservoir and one structure. That would be phenomenal, and we're moving the rig and we hope to have those results by the end of the year.

GARRETT: Now what is the timetable for getting your processing plant up and running at the moment?

MULACEK: The time table is now more solid and sure and we're all dependant on contractors and the steps to get a project complete. But the timetable will be around 2013-2014.