ROSS KELLY | Market Watch
PLANS FOR A POSSIBLE EXPANSION of ExxonMobil Corp's $15.7 billion PNG LNG project in Papua New Guinea suffered a slight setback after an exploration well failed to discover any natural gas.
The Trapia-1 well did not intersect any prospective reservoir intervals before reaching its total depth of 3,800 meters, the US company's joint venture partner Oil Search Ltd said in a statement this afternoon.
Hopes that the partners will find enough natural gas to expand the project to three LNG production units from the two currently under construction were recently buoyed by a large gas discovery at the P'nyang prospect.
The venture is also exploring for more gas at the Hides prospect and analysts remain optimistic that a third production unit, or train, will eventually be constructed.
In a note Tuesday, Commonwealth Bank of Australia analyst Luke Smith said the Trapia-1 well was high risk and the market's focus is on the Hides development well as that field has the potential to contain more than 10 trillion cubic feet of natural gas resources--enough to support at least a third train.