LNG venture can support third output unit: UBS （June 18, 2009）

SYDNEY: ExxonMobil Corp’s A$12.5 billion (K34.2 billion) liquefied natural gas (LNG) venture in PNG has enough resources to support a third production unit that could come on stream by 2017, UBS AG said.
Spending on the initial phase of the project would make it cheaper to build an additional production unit, which could be completed for about A$3.5 billion (K9.6 billion), UBS analysts said in a note.
The venture has “defined resources that are highly supportive” of a third train, or unit, UBS said.
Exxon and its partners had given the go-ahead to build the project before the year-end, Oil Search Ltd, the second-biggest stakeholder in the venture, said.
PNG LNG is among more than 10 proposed projects in Australia and PNG seeking to tap a forecast increase in demand in North Asia for cleaner-burning fuels.
The venture plans a two-production-unit gas liquefaction plant near Port Moresby, with gas sourced from PNG’s highlands.
The project would have a capacity to produce 6.3 million metric tonnes of LNG a year.
The third train, with a capacity of 3.15mt a year, could come on stream by around 2017, assuming a final investment decision was made about a year after the project start-up, UBS analysts led by Melbourne-based Gordon Ramsay said in a June 10 note to clients.
Resources would need to be converted to reserves to support the additional train, UBS said. – Bloomberg