The field, located in south west Papua New Guinea, has an estimated resource of 1.7tcf of in-ground reserves, but due to the difficulty of transferring the gas to market several of the partners have already written down their investment.
However, Oil Search has now entered an agreement with Mitsubishi Gas Chemical Company and Itochu Corporation of Japan to complete a feasibility study into the potential use of domestic gas for methanol manufacturing in PNG.
"The involvement of a potential end user and a Japanese bank who have already made field trips to the area indicates a genuine and strong interest," says Dr Howard Brady, CEO of Mosaic (28.6%).
"Investors should be aware that it will take time to fully explore the potential for economic viability of such a project. However the gas content at Kimu with zero sulphur and zero carbon dioxide content makes it extremely suitable as a feedstock for methanol", Dr Brady added.
The study will review location and infrastructure requirements, and determine the funding and commercialisation options available for a methanol plant.
Natural gas feedstock for the methanol facility would be supplied from the Kimu gas field, located onshore within Petroleum Retention License 08, and the Uramu gas field, which is located offshore in the Gulf of Papua within Petroleum Retention License 10.
The Joint Venture Partners in Kimu were offered a five year Retention Licence over the area in October 2002.
The Joint Venture participants in PRL 08 are Oil Search 44.6%, Mosaic Oil 28.6%, Cue Energy 16.1%, and Gedd (PNG) 10.7%. The partners in PRL 10 include Oil Search 49.55%, Woodside Petroleum 40.45%, and Gedd (PNG) 10.00% The study is expected to be complete by the end of 2003.
