Australian exploration and production company, Horizon Oil, said it has progressed its Western LNG project in Papua New Guinea.
The company noted on Thursday that the pre-FEED results provide independent substantiation of technical concept and cost.
Horizon Oil expects an average net operating cash flow of $60 to 70 million per year, over the next five years, which will provide the company funding for the planning and development of the Western LNG project.
“Our target has been to have WLNG ready to meet a widely-anticipated LNG supply/demand gap forecast to open around 2023,” the company said in its quarterly report.
Recent signs are that demand for new LNG supply may occur in advance of that timing and at stronger pricing.
“The pre-FEED (front-end engineering and design) studies that we commissioned on the three components of WLNG – upstream, pipelines and liquefaction facility – are substantially complete and our project team is in the process of integrating these in order to firm up our assessment of the project prior to moving to the FEED stage,” said Brent Emmett, Horizon Oil’s chief executive officer.
The preliminary results of the WLNG pre-FEED studies, which were carried out by independent engineering firms, provide good confirmation of the technical viability and economic attractiveness of the project, he said.
These third-party studies have pointed to improvements in the development concept, design optimization and efficiencies.
The next task will be to confirm the suitability of the selected pipeline route and location of the liquefaction plant. Planning for the onshore field survey and offshore bathymetry and metocean studies is underway.
Horizon Oil plans to develop a 1.5 mtpa LNG aggregation project and will involve the development of the appraised Western Province gas resources via pipeline to a gas liquefaction facility located near Daru Island and export of LNG and condensate from Daru, with gas and LPG made available for domestic consumers at appropriate points on the pipeline.