Wall Street Journal: Exxon Partner Is Confident About LNG Project in Papua New Guinea

A partner in Exxon Mobil Corp.'s Papua New Guinea natural-gas project said it is confident that enough new gas will be found in the country to justify a significant expansion of the project's processing facilities.

Exxon's biggest partner in the project, Australia's Oil Search Ltd., said sufficient natural gas probably exists in the country's highlands to warrant adding at least one refrigeration unit, known as a train, to chill natural gas into liquid so it can be exported to fast-growing markets in Asia.

Any major boost to the liquefied natural gas produced in Papua New Guinea promises to be a vital new source of profit for Exxon, which is attempting to arrest three years of falling production.

Expansion also would prove a windfall for Papua New Guinea's developing economy.

"By the end of the year, I think we'll have a pretty good idea as to the size and shape of the Hides field" in the highlands, said Oil Search Chief Executive Peter Botten.

A large increase in the amount of LNG pumped into Asia would make the gas market more competitive by creating a new source of supply for buyers in places such as Japan, South Korea and China.  MORE