Australian independent Santos is getting close to finalising its farm-in to the P’nyang gas development in Papua New Guinea, writes Russell Searancke.

P’nyang is earmarked as a feedstock source for a new liquefied natural gas train at the existing PNG LNG complex.

Santos is a co-owner in the PNG LNG facility, so farming in to the P’nyang development will create better alignment of the ownership interests in the two projects.

This will help to “facilitate the development of P’nyang through the PNG LNG infrastructure by minimising any commercial issues between the joint ventures”, said Oil Search, an existing joint venture partner in P’nyang and PNG LNG.

Oil Search added that a binding farm-in agreement should be reached in the second quarter of this year.

Santos confirmed that its proposal to farm in to Block PRL 3 (P’nyang) is “under negotiation”.

P’nyang has a best estimate contingent gas resource of 4.36 trillion cubic feet of gas.

Production capacity is likely to be in the region of 750 million cubic feet per day of gas, with a large onshore production station to be installed at the field location.

A new 250-kilometre onshore gas pipeline will transport gas to the Kutubu field to join the existing gas export pipeline to the PNG LNG facility.

The P’nyang joint venture is hoping to soon finalise a gas agreement with the government to underpin the development.

Weekly

Santos is close to PNG deal