Business Advantage Papua New Guinea
Offshore gem
Twinza Oil is getting closer to producing gas from the Gulf of Papua.
The Pasca A gas condensate field, a carbonate pinnacle reef in the Gulf of Papua, is not a new find. It was discovered in 1968 but it has lain dormant because there has been no commercially viable development solution. But Singapore-based Twinza Oil looks set to change all that. Improvements in drilling efficiency, production technology and development engineering have made the discovery technically and financially viable.
Managing Director, Huw Evans, says the site is about 70 minutes from Port Moresby by helicopter, and 14 hours by boat. It is 120 km from Western Province and 90 km from Gulf Province. The reserve is in 93 meters of water, considered a shallow-tointermediate depth. The area is highly prospective.
‘We are surrounded by two trillion cubic feet of discoveries,’ says Evans. ‘It is well overdue for development and it is not the only one. There are a number of other gas fields that are available for development. With our infrastructure, hopefully we will be the catalysts.’
Evans says the aim is to move to first production in 2021. ‘It is a very simple and straightforward field development because we can very clearly see our target under the ground. That is different from onshore, which is challenging because of the seismic issues.
‘It is a fantastic reservoir (which will have) high production performance. One of the characteristics of PNG, which is very favourable for development, is the extremely high flow rates that we have in the individual wells.’
Evans says the company is close to agreeing terms for a gas agreement with the Government. Twinza has completed planning for installation work, environmental impact statements, concept engineering through to PRE-FEED [front-end engineering design], tendering for all of the major components of the facilities, a macro-economic impact study, a field development plan and a local content plan. Evans says there are no land ownership issues because the site is offshore, but the company is negotiating with government about how best to distribute the benefits.
‘We will be producing 220,000 tonnes of LPG (liquefied petroleum gas) annually—20,000 barrels of liquid per day—which will be roughly 55 per cent condensate and 45 per cent LPG. It will be stored on the offshore vessel and then taken either into the domestic market or for international sales. Currently, the LPG in PNG is imported. We are looking to put as much LPG as we can into PNG at lower prices, targeting diesel replacement wherever we can.
‘Because we return production rates so quickly the cash flow is very high, so the return to the government is almost immediate. They get tax revenue and royalty revenue virtually immediately and Kumul Petroleum as a partner have an equity stake in it as well. So there is a very good return to the state at relatively low cost.’
IT IS A VERY SIMPLE AND STRAIGHTFORWARD FIELD DEVELOPMENT BECAUSE WE CAN VERY CLEARLY SEE OUR TARGET UNDER THE GROUND.