The study shows that there are no technical impediments to the construction of field facilities and an export pipeline from Rift Oil’s Douglas and Puk Puk discoveries to a pipeline end module in the Gulf of Papua, for connection to a Flex LNG production vessel. A suitable pipeline route has been determined which is from the gas fields in PPL 235 towards the Bamu River and then south east to a location in the Gulf.

Flex LNG has signed four ship building contracts with Samsung Heavy Industries for LNG producer hulls and for engineering, procurement, construction, integration and commissioning of the worlds first floating liquefaction unit. The vessels are designed to be moored in the vicinity of suitable gas resources, such as Rift’s, and are capable of processing and storing gas for sale to conventional bulk LNG transport vessels.

Two cases were considered by the study:

Gas flow rate of 300MMscfd which would supply one vessel producing approximately 1.5MTLNG/pa; and

Gas flow rate of 600MMscfd which would need two vessels thereby producing approximately 3MT LNG/pa.

The costs of each of the above cases were evaluated for two different water depths for the vessel location, namely 30 meters (m) and 70m, thus giving four different base scenarios.

In the four scenarios, capital costs range from $678 million to $968 million with a Monte Carlo assessment of the accuracy of costs showing for example a 90% probability that the 300 MMscfd can be delivered for between $700 and $770 million.

The pipeline would be around 300 kilometers from the gas field to the vessel. The pipe would be 20 feet for the 300MMscfd or 26 for 600MMscfd.

The processing plant in the field would handle condensate and any other residues. The study concluded that the gas has no H2S, sulphur or mercury, virtually no CO2 and small amounts of nitrogen so there are no difficult or injurious components to it.

Pipeline design is to a maximum operating pressure of 15.3MP which will enable delivery of the required flow and pressure without immediate compression. Australian pipeline code AS2885 was applied by the study.

During construction the workforce required would be a maximum of 1,200 people.

Jenni Lean, chief executive officer said: Rift is pleased to have established that there are no significant technical road blocks to the construction of a pipeline to the coast of PNG for the export of its gas discoveries. The proposed route is the most suitable for our existing collaboration with Flex and potentially for other methods to commercialisation. The unit export cost for the lower diameter line would be $1/mcf or less, for a reserve base of at least 750 bcf. From our drilling plan for 2009/10 we look forward to confirming the reserves necessary to initiate commercialisation.