Although Papua New Guinea has a strong economy resulting from exploitation of its extensive petroleum deposits and abundance of other natural resources ranging from minerals to forest products, the nation is one of the least developed countries in the Asia Pacific region.
Constrained by the remoteness of its condensate rich natural gas assets, limited domestic needs and considerable distance to overseas markets, Papua New Guinea is investing heavily in multiple LNG projects.
Papua New Guinea-based oil & gas exploration and development company Oil Search has been operating in the country since 1929, and has a portfolio including substantial joint-venture holdings in the Gulf of Papua that could bolster the PNG LNG project or alternatively become another LNG hub.
Oil Search has contracted the semisubmersible Stena Clyde to drill at least two wells in the Gulf of Papua, initially scheduled for late 2012, but since delayed.
The company also has an interest in the Kumul marine terminal located 40km offshore in the Gulf of Papua which receives crude oil via a 265km pipeline from its majority held Kutubu oil project, the first commercial oil development in Papua New Guinea.
The petroleum industry in Papua New Guinea is poised to yield a sharp rise in revenue with the PNG LNG project and Stanley field recovery, both online next year. PNG LNG will also provide a needed lift of 20,000b/d of condensate to the onshore Highlands oil production, which has declined by 40,000b/d from a high of 70,000b/d in 2000.
The future of LNG export and condensate production in Papua New Guinea appears bright, likely both alleviating the shortfall in domestic oil demand that stood at around 15,000b/d in 2009 and leading to an overseas market for liquid hydrocarbons.