Papua New Guinea's Elk-1 gas field could feed LNG

Nov. 14, 2006
InterOil Corp.'s Elk-1 gas discovery in the onshore eastern Papuan basin could potentially kick-start an LNG industry in the country, according to Papua New Guinea Prime Minister Michael Somare.

Rick Wilkinsonf
OGJ Correspondent

MELBOURNE, Nov. 14 -- InterOil Corp.'s Elk-1 gas discovery in the onshore eastern Papuan basin could potentially kick-start an LNG industry in the country, according to Papua New Guinea Prime Minister Michael Somare. He said the project could be a driving force towards the creation of an industrialized nation.

The facility, proposed by Toronto-based InterOil and international investment bank Merrill Lynch last month for a site near Port Moresby, could be delivering LNG cargos by second quarter 2011 (OGJ, Oct, 23, 2006, p. 32)

Papua New Guinea authorities likely will officially declare Elk-1 a discovery once the technical staff completes a review of drillstem test data that indicated an open flow potential of 28.5 MMcfd of gas.

Reserves are reported at 3 tcf of gas.

InterOil intends to drill appraisal wells on Elk and conduct more exploration on adjoining structures.

Interestingly, Papua New Guinea's endorsement of Elk coincides with the increasing unlikelihood that the long-proposed Papua New Guinea-Australia gas pipeline project will go ahead.

Somare also had a dig at the world's oil majors when he said Papua New Guinea needed to be proactive in the development of its natural resources. He said the country could not allow supermajors to place the country's projects on a list with other targets worldwide and leave them on the back burner for a decade.

He added that InterOil's unorthodox approach to kick-starting projects may be what is needed to bring overseas investors together with some of Papua New Guinea's rich, but dispersed petroleum assets.