He was speaking when officiating at the flow and flare ceremony for a massive gas find at Interoil’s Antelope One site in Gulf province.
InterOil Corporation needed to raise $5 billion to complete the infrastructure for the project, including the construction of a pipeline to its Napa Napa oil refinery on the outskirts of Port Moresby.
At Monday’s test flow, Sir Michael opened the first valve, which flowed and flared gas equivalent to 105.5 million cubic feet per day.
The second flare was measured to produce a “world record” 383mcfd and it could have been more as technicians allowed the gas to flow through a three-inch pipe instead of the full six-inch diameter to control the heat.
Antelope One can produce up to 545 mcfd of dry gas, which, when flowed, measures 382mcfd and this can produce up to 5,000 barrels of condensate per day (gas in its condensed state), or equal to a total of 68,600 barrels of oil per day.
The productivity of this well was way above the 350-550mcfd of gas production needed to start a liquefied natural gas project.
The company said a third party-confirmed capacity of 17.7 billion cubic feet per day of gas, places PNG as one of the best quality gas producers in the world with a 760m column of gas.
InterOil’s chief executive officer and Chairman Phil Mulacek said this was a world record as no such discovery had happened prior to Antelope One.
“The well flowed enough that in a little bit of time, just one minute, it would have filled up a pipeline from Port Moresby to here, in one minute. We took an hour and 30 minutes to fly the same distance,” he said.
“We understand it to be a record for the world; we’re not cheating, we’re not horizontal; it’s a straight vertical column. “It proves that the nation has one of the highest quality reservoirs on this planet,” Mulacek said.
The discovered oil well is the largest onshore vertical hydrocarbon column in the entire Asia-Pacific region with more than 2,600ft of gas and condensate, which is a new resource discovery estimated by InterOil engineers at more than 10 trillion cubic feet.
Sir Michael said the “world record natural gas discovery” will place PNG as a co-leader with Australia in supplying LNG to Asian markets.
“InterOil has elevated the status of PNG in global energy markets and has positioned our country to become the dominant source of new LNG for the growing energy markets in Asia for decades to come,” Sir Michael said.
“We introduced a new upstream fiscal policy and InterOil is the only company that believed in PNG and is willing to commit significant capital to our future development,” he said.
“InterOil stepped up to the plate with a $125 million (K349 million) drilling commitment, the largest exploration program in our history,” he added.
“The next steps to realize that vision has become clearer and it is now our turn to commit to clearing the path towards first production with our loyal and dependable partner, InterOil,” Sir Michael said.
Meanwhile, Petroleum and Energy Minister William Duma announced that InterOil’s petroleum license, scheduled to expire on March 23, was extended for another five years based on advice by the petroleum advisory board.
Wayne Andrews, InterOil’s vice president on capital markets and investor relations, said InterOil might start condensating next year and, in the next five years, might start producing for world markets from its Elk/Antelope One field for leading LNG markets like Japan, South Korea and Spain.
