Senior Chevron official comments on the Papua New Guinea gas project
According to this article Papua New Guinea gas is about 7-9 trillion cubic feet, the Pandora field = 1.6-1.7 TCF = 18-23.5% of all gas in the country, Lundin Oil owns 1/2 of this.
Niche deals 'key to gas'
Post Courier, October 23
PAPUA New Guinea needs to identify niche markets for its gas and either target them aggressively or miss out completely, a world petroleum expert says. Visiting senior official from Chevron Overseas Petroleum, Dr Nahum Schneidermann, told a petroleum engineers luncheon yesterday that there was an oversupply of gas in the world and limited markets.
Although the gas finds offered opportunities for the country, on a global scenario, he said, PNG was a small player. ''PNG in the world global scheme of things (in oil production) is not a major player, that doesn't mean there are no reserves here,'' he said at the luncheon. ''Yes, in the gas business, PNG may have a role but not a major one.''
He said apart from the traditional oil and gas powers in the Middle East, PNG faced further competition from neighbors Indonesia and Australia. ''In oil, PNG is not a global player although it has a resource that is important to the country, important to the people, important to the industry.
''This resource is being worked very hard by our people who are trying to maximise the yield, maximise the recovery factors and to extend its life for as long as possible, but right now, we don't see any major reasons to expect any major changes in the volumes. ''In gas, we have to take an account of the global market which is enormous, and the resource of gas is enormous, larger than oil and is much more abundant everywhere,'' Dr Schneindermann told the Post-Courier later.
He said the limitation in commercialising gas reserves was ''finding the market'', adding the main markets were in North America, Europe and Asia (Japan and Korea). ''Most of the gas found in the world, is competing for those three areas so South America is essentially looking at bringing gas to North America; Africa, Russia are bringing gas to Europe,'' he said.
Dr Schneidermann said the potential of very rapid competition from within Australia, the North West Shelf and the Timor Sea threatened PNG's Queensland pipeline project. ''What you really have is two drivers. One is to create a local market where you have people, like in Queensland, who can pay for the investment. The other is to develop it faster than the other competitors, otherwise, you have a resource that has no value to the country,'' he told the luncheon.
Dr Schneidermann said PNG would have to compete aggressively for an LNG project but might be beaten on volume, long-term commitments and costs per barrel of oil. He said the Middle East had many LNG projects on the drawing board for the Japanese and Korean markets, and may yet face competition from Indonesia.
''For PNG gas, which is about 7-9 trillion cubic feet of gas, to compete in the liquefication project is difficult because the utilities demand long-term gas. ''They demand long-term commitment for many years, and in order to make it profitable, you have to invest lots of money up front before you sell it.
''You have to have a large resource. The only other way you can compete is what I call to develop a niche market, localised markets. It doesn't have to be within the country. ''It could be within some limit where it's still profitable to pump it, and where on the end of this pipeline, you have a market that will pay for your investment, and therefore will provide your return on investment to continue producing the market.
''So for all those people who are marketing in the same place that PNG wants to market, they can compete with PNG on volume, they can compete against you on cost per barrel,'' Dr Schneidermann said.
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