Peak Oil unveils big gas discovery

A private exploration company chaired by Curtin University’s Brent McInnes has announced the discovery of a huge gas field that could underpin a new LNG plant in PNG.

Modelling of the Exotica North gas prospect indicates a 90 per cent probability that it holds 3.6 trillion cubic feet of natural gas, Peak Oil PNG has announced.

This would rank the prospect alongside the Hides gas field, which supplies Exxon’s PNG LNG project.

Professor McInnes, who is executive director of Curtin’s John de Laeter Analytical Centre, said Exotica North would be the first offshore natural gas discovery for PNG in 50 years.

“It represents a new energy frontier and it is without doubt one of the most important energy discoveries in recent times,” he said.

The prospect is located in the New Ireland Basin, located north-west of the PNG mainland and between New Ireland and Lihir Island.

Professor McInnes said Peak Oil had spent close to $20 million conducting research within the Basin since he founded the company in 2009.

This followed scientific reports of subsea hydrocarbon seeps in the area, similar to the seeps associated with oil and gas fields in the Gulf of Mexico and the North Sea.

2D seismic data indicate that the seeps are associated with a giant anticlinal structure, 32 km long and 9 km wide.

The company’s latest research findings are based on data gathered during a two-month marine geoscience expedition to the area in June and July this year.

Peak’s current plans are to embark on a capital raising in 2024 to fund further seismic and other surveys to delineate the full extent of the structure.

That would be followed by exploratory wells, in waters with a depth of 1,300 metres.

Professor McInnes said each well would cost about $US100 million and would require a ‘farm down’ of the prospect to a major oil and gas company.

Peak announced its research findings jointly with PNG’s Minister for Petroleum and Energy, Kerenga Kua, at the Papua New Guinea Chamber of Resources and Energy’s investment conference in Sydney today.

Professor McInnes said he had already been approached by brokers keen to support a capital raising.

Pending conclusive drilling tests, he believes the Exotica North prospect is a very attractive proposition for commercialisation.

It could be a new source of energy for the PNG market, notably the nearby Lihir gold mine, which currently imports heavy fuel oil from Malaysia.

The prospect is closer to major LNG importers such as China, Japan and South Korea and could cut transport times by 25 to 45 per cent compared to other LNG plants in the region.

Other attributes include deep water port access, an international airport and sealed highway on New Ireland.