Oil Search Ltd. said on March 6 it failed to find a gas reservoir in exploration drilling at its Hides field, closing off one option for supplying an expansion of the Papua New Guinea LNG plant.

The Papua New Guinea (PNG) LNG plant, operated by ExxonMobil Corp, began exporting LNG last year from two trains, or modules that freeze the gas, and the owners are looking to line up new sources of gas for a third train.

Oil Search and its partner Santos said the Hides Deep well, drilled down to 4,633 meters, had found lots of sandstone intervals, but they contained water.

Oil Search had hoped to find a reservoir that was about 700 meters deeper than the existing main producing reservoir.

“It would have been great, because it would have been a discovery right smack underneath where they have their infrastructure,” said RBC analyst Andrew Williams.

“It’s disappointing, but you just go on to the next (exploration well). The country is quite literally gas prone.”

Oil Search's P'nyang field is seen as a promising source for a PNG LNG expansion.