Exxon Mobil Corp.’s liquefied natural gas project in Papua New Guinea could add a third production line because of the possibility of finding more natural gas, Sanford C. Bernstein & Co. said.
The Hides gas area may contain 50 percent additional deposits compared with currently booked reserves, Bernstein said in a report today. Exxon and Oil Search Ltd. plan to produce 6.6 million metric tons a year of the frozen fuel in 2014 from two production lines at a $15 billion LNG venture.
“The main trunk-line for PNG LNG has the capacity to accommodate a third and possibly fourth LNG train at a low cost, making the marginal return on LNG expansion extremely attractive,” Hong Kong-based analysts, and , said in the e-mailed note.
Oil Search and InterOil Corp. are among those planning to build LNG projects in Papua New Guinea to supply growing Asian economies. The country remains under-explored and under- appraised, and the possibility of multi-trillion cubic feet discoveries, which could underpin future LNG projects, remains high, Bernstein said.
Oil Search wants to find reserves to support two more processing units at the Exxon-operated LNG venture, it said in April.
The analysts gave Oil Search an “outperform” rating and increased the share-price target to A$8.50 from A$8. Oil Search advanced 1.2 percent to A$7.01 in Sydney trading today, compared with a 0.1 percent increase for the benchmark S&P/ASX 200 Index.