Australian oil and gas company Santos has entered into an agreement with oil giant ExxonMobil, Australian company Oil Search and Japan's Nippon Oil to jointly carry out a study to determine whether to build a standalone LNG project based on the Hides gas field in Papua New Guinea.
In a press release, Santos commented that the pre-FEED study will evaluate the technical and commercial merits of developing a five to 6.5 million tonne per annum LNG facility. The company added that the facility would target its first cargoes in 2012 to 2013. According to Australian daily the Herald Sun, the study will cost $72.9 million.
Santos, which has a 25% working interest in the Hides gas and condensate field, said that the Papua New Guinea site is expected to underpin the gas volumes required, with additional gas potentially sourced from the nearby Juha and Angore fields.
The Herald Sun, has cited Santos spokesman Christian Bennett as saying that the project would have an initial lifespan of 20 to 25 years, which could be extended if further gas reserves are discovered. Mr Bennett is also reported to have said that the gas is likely to be sold to customers in Asia.
In addition, the Herald Sun quoted John Ellice-Flint, managing director of Santos, as saying: Santos has been involved in exploration and production in PNG for more than 30 years and we look forward to playing a role in evaluating the LNG development option for our gas resources at the Hides field.