Report April 2, 2019
Attractive LNG portfolio
Due to its significant advantages over other energy sources, demand for LNG is forecast to grow strongly. LNG supply will remain highly competitive due to an abundance of natural gas resources. ExxonMobil is progressing a number of advantaged, low-cost LNG supply opportunities to meet growing global demand. This includes operations and potential projects in PNG and Mozambique.
Report April 2, 2019
Attractive LNG portfolio
Papua New Guinea (PNG)
The ExxonMobil-operated PNG LNG project reached a record daily production milestone in 2018, reaching the equivalent of 9 million tonnes per year, a 33 percent increase over the original design. PNG LNG is considered among the world’s most reliable LNG operations.
Following the acquisition of InterOil Corporation in 2017, ExxonMobil, working with development partners, evaluated potential concepts to approximately double liquefaction capacity with a second phase of LNG development. The project will access resources from the nearby Elk and Antelope fields, as well as the ExxonMobil-operated P’nyang field, where an appraisal well in 2018 led to an 84 percent increase in estimated resource size.
The proposed development includes a three-train expansion that will leverage existing infrastructure at the highly successful PNG LNG plant site. This approach will capture synergies and further reduce costs.
We also continue an active exploration program in PNG, seeking to further expand the resource base. We acquired approximately 300 kilometers of 2D seismic data in 2018 and are drilling a second well at the Muruk discovery to better understand the resource size and optimize development concept selection.
Our total PNG position now stands at more than 13 million acres, making us the largest international oil company (IOC) acreage holder in the country.
> 80% increase in P'nyang resource
Operations in Papua New Guinea are challenging due to its remote, mountainous terrain. ExxonMobil has decades of experience optimizing exploration in this type of environment. Our confidence in the region’s potential has led us to capture a leading acreage position.
We are actively exploring to unlock the value from this significant resource. In 2018, we acquired more than 300 kilometers of 2D seismic data. We applied new technologies to data acquisition and processing, improving image quality and reducing cycle time of resource characterization. The improved data enabled us to model the subsurface better and identify potential natural gas traps for future drilling.
Early in 2018, we successfully completed drilling the P’nyang South-2 well, which added more than 2 trillion cubic feet of natural gas to the P’nyang field resource estimate – more than an 80 percent increase. Ongoing exploration is critical to sustaining and growing in-country operations.
We are leveraging frontier project development experience and large-scale LNG technology to develop Area 4 offshore Mozambique, following the acquisition of a 25-percent indirect interest in 2017. Area 4 holds an estimated 85 trillion cubic feet of natural gas in-place, and is one of the world’s largest and most cost-competitive LNG supply opportunities. ExxonMobil is leading development planning for the construction and future operation of the LNG trains. Area 4 has the potential capacity to produce more than 40 million tonnes per year (Mta) of LNG through a large-scale, multi-phase development.
The first phase of development is the Coral Floating LNG (FLNG) project. Construction of the 3.4 Mta vessel commenced in 2018 and is progressing on schedule toward a planned 2022 start-up. The next phase, Rovuma LNG Phase 1, consists of a subsea development feeding two onshore LNG trains, each with a capacity of 7.6 Mta. In July 2018, the project reached a major milestone when the Area 4 concessionaires submitted a plan of development to the government, targeting first LNG in 2024. Area 4 co-venture participants also secured LNG offtake commitments from affiliated buyer entities of the partners, which position the project to move toward a final investment decision in 2019.
In addition, we advanced plans to explore Mozambique’s offshore resource potential, with finalization of exploration and production contracts for offshore blocks A5-B, Z5-C, and Z5-D together with partners Rosneft and ENH (Empresa Nacional de Hidrocarbonetas, the Mozambique National Oil Company). We subsequently farmed down 10-percent working interest to Qatar Petroleum, pending government ratification.
Rovuma LNG and Coral FLNG projects
Area 4 lies 50 kilometers offshore Mozambique in depths ranging from 1,500 to 2,600 meters. Gas for the Rovuma LNG Phase 1 project will be produced via subsea wells and transported by pipelines to a 15-million-tonnes-per-year LNG plant to be constructed at the Afungi industrial site south of Palma.