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The company will choose between an ExxonMobil-led project capable of producing 5-6.5 million tonnes of LNG per annum or a venture with British major BG Group, which Oil Search recently said would be a two-train project capable of producing a total of 7MMtpa.
The ExxonMobil-led project is involved in a detailed $US60 million pre-front end engineering design study to evaluate its technical and commercial merits.
AGL Energy announced yesterday that it would fund 3.3% of the cost of the study.
“This agreement will materially advance the chances of commercialising our PNG gas," said AGL managing director Paul Anthony.
“We are keen to explore all available options for developing our share of gas reserves as expediently as possible, with an objective to maximise the value of these assets.
“Considering recent market developments, the momentum is now building for the prospects of a PNG-based LNG project.”
The ExxonMobil project, which could cost $7-10 billion, will source its gas feedstock from the Hides, Juha and Angore fields and could ship its first LNG cargo in 2013.
Other partners in the cost-sharing agreement are Santos and Nippon Oil.
Oil Search has said previously that its BG venture, which will source gas primarily from the Kutubu field and may draw gas from other Oil Search fields, could start LNG production in 2012.
Capital costs are also reportedly lower as significant infrastructure is already in place in the area.
The BG venture provided “an ideal fit” for two proposed petrochemical plants being considered by Japanese and Indian corporations, PNG newspaper the National reported.
Toronto-listed InterOil is working on a competing LNG project that could produce up to 9MMtpa with initial production in 2012.
This is subject to the proving up of a large gas resource at its recently discovered Elk field in Gulf province.
