Floating LNG (FLNG) developments are becoming more popular and viable to operators as the technology advances toward its first operational project, and Papua New Guinea (PNG) is among the countries keen to apply FLNG technology to its offshore sector.

Cott Oil & Gas is looking to push ahead with an FLNG solution for the Pandora gas field in PRL 38 offshore PNG. The decision comes after a concept study by FLNG developer Wison Offshore & Marine showed such a project is technically and commercially viable.

Pandora has 22.66 Bcm (800 Bcf) of best estimate (2C) gas resources. The field is located in the Gulf of Papua midway between Port Moresby and Daru at a depth of 1,400 m (4,593 ft) and a water depth of about 120 m (394 ft). It is a carbonate reef structure with excellent porosity and deliverability.

The Pandora 1X discovery well was drilled in 1988 over the A Structure and found a 298 m (978 ft) gas column which was tested at 1.61 MMcm/d (57 MMcf/d) of gas. The Pandora B1X well was drilled in 1992 over the B Structure and encountered a 110 m (361ft) gas column which was tested at 1.22 MMcm/d (43 MMcf/d).

“There are several prospects that have been identified within the license by 3-D seismic,” Cott said. “Growing awareness that many gas fields will not be developed other than with FLNG is driving technological development and reducing costs making FLNG far more commercially and technically viable.”

The Wison study evaluated an offshore FLNG concept against a near shore LNG option and decided that the FLNG solution was the best to pursue.

The FLNG concept will require three development wells with subsea completions. The vessel will have a storage capacity of 170 Mcm (6.0 MMcf) and 1 MM tonnes per annum (tpa) of production. The vessel also will have onboard gas treatment and re-injection of sour gas facilities. The estimated capex is between $900 million and $1.1 billion.

The near shore LNG option included production via a buoyant tower for processing and sour gas reinjection; 160 km (99 miles) of clean gas pipeline to near shore location; and a 170 Mcm (6.0 MMcf) storage barge with a 1 MMtpa liquefaction capacity. The estimated capex, including pipeline and tower, was between $1.3 billion and $1.4 billion.

“Papua New Guinea is a growing LNG hub for Asia, and Cott’s licenses offer exposure to this very uber-hot market segment. This is highlighted by the start-up of ExxonMobil’s PNG LNG project earlier this year,” Cott said. “Already several vessel owners and infrastructure partners have expressed strong interest in a build-own-operate model for gas owners.”

Cott has a 40% stake in PRL 38, while operator Talisman holds 25%, Kina Petroleum has 25% and Santos has 10%.

Meanwhile, Cott has reached an agreement with Kina Petroleum and Heritage Oil to surrender its 20% interest in PPL 437. In exchange, Cott will not be required to meet further contributions to joint venture expenditures.

“Our withdrawal from PPL 437 on favorable terms provides Cott with the opportunity to focus on PRL 38 where we believe there is a significant opportunity to achieve a positive outcome for Cott shareholders,” Cott’s managing director Andrew Dimsey said.

PNG LNG Expansion Plan

ExxonMobil, operator of the PNG LNG project and PRL 3 in PNG, has signed a memorandum of understanding (MoU) with the PNG government for the expansion of PNG LNG.

Under the MoU, the PNG LNG project will supply electricity and gas for domestic power generation, providing a reliable and clean source of energy to support PNG’s power needs.

The agreement details the provisions for an LNG expansion project, including the award of a petroleum development license (PDL) and associated pipeline licenses for the P’nyang gas field in PRL 3, said partner Oil Search, which would have a 38.51% stake in PRL 3.

P’nyang will provide additional long-term gas reserves for power generation and project expansion, including expected debottlenecking of the existing trains and a third LNG train.

The MoU sets out an agreed timeline between the PRL 3 co-venturers and the government for a final investment decision (FID) for an additional LNG train.

“The commitment from the PRL 3 owners is for the sanction of the third train in the earliest timeframe, subject to completion of typical activities including appraisal, marketing, financing and development engineering on P’nyang,” Oil Search added. Under the agreement, a FID will be taken year-end 2017 at the latest.

The PRL 3 licensees are in the process of finalizing the PDL application for P’nyang, which according to the MoU timeline is expected to be offered by the end of first-quarter 2015.

Preparations are underway for appraisal drilling and development engineering studies, which will start this year.

CGG Bags Seismic Work

CGG has been awarded an onshore seismic and an airborne gravity survey by InterOil Corp. to assess the hydrocarbon potential of acreage in PNG.

CGG’s airborne group will undertake a large FALCON airborne gravity gradiometer (AGG) survey to acquire 11,000 line km of high-resolution data with fixed-wing aircraft and 25,700 line km using rotary-wing aircraft, better suited to acquiring high-resolution measurements in the rugged terrain, CGG said.

The 2-D conventional land seismic award comprises a 465-km (289-mile) survey in InterOil’s southern PPL 474 and PPL 476 permits (the Murua survey) and may include additional coverage totaling more than 200 km (124 miles) to the north over the Triceratops and Raptor discoveries.

“To ensure robust operations in challenging operating conditions CGG will deploy 2,100 Sercel UNITE cable-free channels and autonomous seismic source technology during the two-part survey which is due to start in January and end in August 2015,” the company said. “CGG’s Bangkok imaging center will process the land seismic data as part of the integrated service CGG is offering InterOil.”

Horizon’s Nama-1 Downer

Horizon Oil reports that the Nama-1 exploration well in PPL 259 in the Western Province of PNG has proved disappointing.

The well was spudded on Dec. 4, 2014, and reached a total depth of 3,533 m (11,592 ft). The well encountered a total of 77 m (253 ft) of the target Early Cretaceous Elevala and Toro sandstones as well as Late Jurassic Kimu sandstones, which are productive in the nearby Stanley Field.

“Subsequently pressure measurements and sampling were taken in the key prospective zones, followed by the acquisition of side wall cores. The sands, which were considerably thicker than predicted, calculate as being gas-saturated; however, reservoir properties are of poor quality and cannot be considered to be commercially productive at this location,” Horizon said.