Gas field development projects of Nippon Oil Exploration

Abstract

Nippon Oil Exploration Ltd. (NOEX), a subsidiary of Nippon Mitsubishi Oil Company, participates up-stream business in 11 countries with 20 oil and gas E & P projects, where NOEX has the role of operator in Malaysia, Vietnam, Australia and the United States. NOEX is involved in several gas projects in South East Asia, Australia and the United States. In general, gas field development could be commercialized on the condition that gas markets are large enough to commit long-term gas supply. Transportation method of produced gas from field sites to markets today is limited only to either pipeline or LNG tankers. These limitations restrict to make a profit in a short time, specially on these gas fields located in remote area from markets, even for bigger size of reserves. Most of NOEX gas development projects are being carried out by conventional methods, with the exception of newly discovered gas field in Australia, where early economical development is sought with the application of new technology. In this paper, five NOEX gas projects are introduced from the viewpoints of three different development types, such as pipeline, LNG and new technology.
Yetagun gas field, which was discovered in 1992, offshore Andaman Sea in Myanmar, started gas production in May 2000 to export gas to Thailand through pipeline. Another gas pipeline project has been planned in Papua New Guinea to utilize oil fields' associated gas to Australian market. Gas fields in offshore Sarawak, Malaysia discovered in 1990 through 1994 are under development to feed source gas to MLNG-3 plant, which is also under construction in Bintulu, Sarawak. Planned start-up date of gas production is October 2003. Tangguh LNG project in Indonesia is also in progress, however, difficulties of finding new customers in saturated Asian gas market cause prolongation of project schedule.
In May 2000, new gas reserves were discovered by drilling NOEX's exploration well Crux-1 in AC/P23 licensed area in Timor Sea, West Australia. Longer distance to the shore market and middle size of the reserves may prevent the early development of Crux gas field in case conventional approach is implemented. Application of Gas to Liquid (GTL) technology may be the most realistic alternative for Crux development under today's saturated LNG market, small domestic market and global environmental requirement. Under these circumstances, NOEX has started a feasibility study of GTL applicability to Crux gas field to make a profit as early as possible. Once GTL technology becomes viable both technically and economically, NOEX's strategy to gas resources would be changed to more aggressive direction.