Talisman on track

TALISMAN Energy could officially launch an LNG project in Papua New Guinea in two years.
Talisman on track Talisman on track Talisman on track Talisman on track Talisman on track

Published in the Feburary 2012 PNG Report magazine

The Canadian oil and gas player is at the forefront of the rush into the wet-gas rich Western province where it has significant stakes in nine petroleum licences.

The first cab off the rank is the $US300 million Stanley liquids recovery project it shares with Horizon Oil in petroleum retention licence 4.

It was targeting first production in late 2013 when it was sanctioned last year although there have been delays in receiving the necessary petroleum development licence for the Stanley field.

A Talisman spokesperson commented on the issue to PNG Report and raised the possibility of further condensate cash flow courtesy of the finds from its wells in the Elevala and Ketu fields in PRL 21 last year.

"We continue to support Horizon in their work with the various government departments that need to sign off on the Stanley PDL and are confident that this government approval process will be completed soon," Talisman said.

"Also, successful appraisal of Elevala and Ketu has added 2C [best case] contingent liquids resources with a target to be on production in 2016. Further associated liquids in Talisman's PNG portfolio could be significant."

PNG's condensates typically fetch premium prices - which makes this priority unsurprising - but Talisman has long flagged possible LNG commercialisation of the accompanying gas.

Talisman has a two-year deadline on proving up enough resources for a potential 3 million tonne per annum LNG operation.

"Exploration and appraisal drilling success in 2012 has added discovered contingent 2C resources and extended the area of the proven play fairway," it said.

"The 2012-13 seismic program will deliver further drillable prospects to support the multi-year drilling campaign. 2C resource build is on track to deliver a target of 2 to 4 trillion cubic feet of gas by the end of 2015 which is modelled to underpin up to a 3Mtpa LNG export scheme."

The exploration drilling success of last year was Talisman's Weimang-1 well in Western Province.

Talisman announced it hit the pre-drill estimates but was yet to specifically reveal how much gas the well hosted.

"As outlined in the presentation made at the recent PNG Chamber of Mines and Petroleum conference, we have established an aggregate of approximately 1.5Tcf of contingent resources in our Western Province licences," Talisman said when asked for Weimang resource figures.

Almost 12 months ago Talisman struck a $280 million joint venture with Mitsubishi over its LNG plans, which gave the Japanese conglomerate average stakes of 20% in Talisman's Western Province licences.

Talisman confirmed that the JV with the notable downstream player was in good standing.

"The relationship with Mitsubishi is progressing well and confirms they are supportive of our forward work programs," Talisman said.

"We believe that the chance of project success has been significantly enhanced by our partnership with Mitsubishi Corporation."

Another drilling campaign is expected later this year.

"Our commitment to working in PNG has been significant, with plans for exploration seismic and drilling to the end of 2015," Talisman said.

"A multi-well drilling program is due to start later this year once the seismic data that is currently being acquired has been processed and interpreted. We are approximately halfway through acquiring almost 500km of 2D seismic data across a number of our licences."

With its gas accumulation strategy going to plan, Talisman is also pursuing PNG nationals for its future development plans.

"As Talisman's business in PNG continues to mature, we have localised key senior positions and have recruited graduate engineers from Unitech."

  • NEW: Digital version of PNG Report magazine - View here
  • Porgera: Barrick-PNG talks go on - Read more
  • Follow the companies investing in the PNG market - Read more