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Osaka Gas joins Horizon Oil in Papua Wet Gas and LNG projects

Horizon and Osaka Gas to ally in Papua New Guinea

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe Australian Horizon Oil Ltd (Horizon) and the large utility company Osaka Gas from Japan signed a strategic alliance to develop acreage gas fields in Papua New Guinea (PNG) for the production of condensate and liquefied natural gas (LNG).

In November 2012, Horizon had announced to be in contact with large international companies to take stakes in its acreages located in the West Province of Papua New Guinea.

For Horizon, the purpose of this strategic alliance is to share the efforts for the development of the wet gas fields and contribute to their monetization under the form of condensate, domestic gas sales, liquid petroleum gas (LPG) and export of LNG.

Horizon_Papua_New_Guinea_LPG_LNG_ProjectFor Osaka GasHorizon project in Papua New Guinea brings an opportunity to access significant resources in a valuable combination of condensate and natural gas at a short distance from home compared with alternative sources to come from Australia, Africa or Middle-East.

With this first opportunity to access gas and condensate resources in Papua New Guinea, Osaka Gas will have the possibility to expand its exploration and production in this country and to diversify its current sources of supply with liquids rich natural gas.

According to the terms of the strategic alliance, Osaka Gas will acquire 40% of Horizon interests in three blocks: PRL 4 (Stanley field), PRL 21 (Elevala and Ketu fields), and PPL 259.

In addition Osaka Gas will have the option to take 40% interests in the licenses recently acquired by Horizon  in the blocks PPLs 372, 373 and 430 that may help to feed the LNG project.

As a result of this operation, all the stakeholders of these blocks will share the working interests as following:

PRL 4 (Stanley field): Horizon (30%), Osaka Gas (20%), Talisman (40%), Mitsubishi (10%)

 – PRL 21 (Elevala and Ketu fields): Horizon ( 27%), Osaka Gas (18%), Talisman (32.5%), Kina Petroleum (15%), Mitsubishi (7.5%)

 – PPL 259: Horizon (15%), Osaka Gas (10%), Eaglewood (65%), Mega Fortune (10%)

These acreages cover 7,900 square kilometers in the Western Province of Papua New Guinea and are estimated to contain 125 million barrels of oil equivalent (boe) of net certified reserves and contingent resources.

In addition to the 40 million barrels of condensate and 26 million barrels of LPG, the actual discoveries in the Stanley, Elevala and Ketu fields bring the natural gas reserves above 1.2 trillion cubic feet (tcf).

Horizon Papua New Guinea project at feasibility study

With such reserves, Horizon and its partners are working on the feasibility study of the project.

They are currently planning to build a gas central processing facility with a capacity of 140,000 cf/d of gas.

To be located closed to Kianga, the Stanley gas central processing facility should produce 4,000 b/d of condensate.

Horizon_Papua_New_Guinea_Gas_Central_Processing_Facility_ProjectWith Osaka Gas joining Horizon, the partners are now investigating the opportunity to monetize the gas with a gas-fired power plant.

Regarding the production of LNG, the actual estimated reserves could feed LNG train of 1 or 2 millions t/y considering that the Tingu prospect could be added on the Elevala field.

This LNG plant should be located on the Daru Island for overseas shipments.

The Daru LNG plant should be supplied in natural gas by a 400 kilometers pipeline coming from Kianga.

Depending on the development of the new licensed prospects, the pipeline could be extended with a section from PPL 373 to connect in Douglas.

In requiring $300 million capital expenditure, Horizon and its partners, Osaka Gas, Talisman, Mitsubishi, Kina Petroleum and Mega Fortune expect to start the commercial production of the Stanley gas central processing facility in 2015.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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