Exxon Starts Exploring for Gas in PNG

ExxonMobil Corp. and partners have started exploring for natural gas to support a possible expansion of the US$15.7 billion PNG LNG gas export project in Papua New Guinea, the Wall Street Journal reported Thursday.

Drilling of the P'nyang South-1 well located in the country's southern highlands commenced Sunday and recently passed a depth of 366 meters.

Oil Search is drilling the well under contract with operator Exxon. PNG LNG is scheduled to start shipping liquefied natural gas, or LNG, to Asian customers from its first two production units in 2014.

The PNG LNG partners, who include Exxon, Oil Search, Australia's Santos Ltd. and Japan's JX Holdings Inc., want to find enough gas to expand the project to three production units, the report said.