Stanley gas-condensate field development approved

The Papua New Guinea government has approved Horizon Oil Ltd.’s proposed $300 million development of the Stanley gas-condensate field in the country’s western province.

Papua New Guinea Petroleum and Energy Minister Nixon Duban has been authorized by the National Executive Council to sign a gas agreement with Horizon and its fellow partners.

This agreement prescribes the key rights and obligations of the state and licensees for the Stanley project, including fiscal terms and commitments to local content. There also is approval for benefit sharing arrangements among the local landowners.

Stanley field will now be issued with a petroleum development license (PDL10) and a pipeline license (PL10) following the formal ceremony to sign the gas agreement this week.

Stanley will initially be developed as a condensate extraction project with reinjection of dry gas until a market develops, both locally and potentially as part of a wider gas-gathering system associated with the country’s LNG projects.

The plan is to produce at a rate of 140 MMcfd of gas from two wells, which is expected to yield a condensate flow of 400 b/d, plus potential for 40 tonnes/day of LPG.

A condensate recovery plant will be built at Stanley field along with a liquids pipeline to Kiunga on the Fly River. Storage will be built at Kiunga while a river tanker being built in Jiangsu in China will ferry the condensate to market outlets.

Stanley-1 flowed at 30 MMcfd of gas and 24 bbl/MMcf of condensate after a workover in mid-2008. Horizon, which is project operator with 30% interest, estimates the project will produce about 8 million bbl of condensate over 10 years.

Osaka Gas has 20% interest, while Talisman Energy began with 40% and Mitsubishi 10%. Talisman brokered a deal with Mitsubishi in 2013 to sell down its interest in this and a number of other PNG projects such that Mitsubishi’s share would rise to an average of 20% in each of the permits concerned.

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