Twinza Oil buys into Pandora field offshore Papua New Guinea

Singapore firm Twinza Oil Ltd. has acquired for $8 million (Aus.) from Perth-based Cott Oil & Gas Ltd. a 40% interest in the undeveloped Pandora gas field in Torres Strait between Queensland and Papua New Guinea.

Cott’s interest in the field is held by a wholly owned subsidiary, Cott Oil & Gas (PNG) Ltd. The deal will be implemented either by Twinza buying 100% of the shares of Cott PNG or by buying Cott PNG’s interest in the license.

The payment will be in exchange for the direct transfer of Cott PNG’s 40% interest in the Pandora retention lease (PRL 38) or by the transfer of all the shares in Cott PNG.

Pandora was discovered in 1988 by a group led by International Petroleum Corp. in 120 m of water, flowing 57 MMcfd on test. Initial reserves were estimated at 3 tcf from a 278-m pay zone, but there was no sign of any oil leg. The gas was very dry and did not even contain associated condensate. Unfortunately there was a small amount of toxic hydrogen sulfide present, the removal of which would add to the cost of development.

Further work indicated that there were several buried reefs in the immediate vicinity and IPC moved to drill Pandora B in 1992. This too was a gas discovery, flowing 43 MMcfd from a 110-m pay zone. Again the gas was dry and contained H2S.

Twinza also is a relatively recent entrant to Papua New Guinea and has a 90% interest in Pasca gas field just north of Pandora. Twinza has filed a notice of discovery and a declaration of a location over Pasca has been requested in preparation for an application for a development license. An environmental inception report also has been filed. The company hopes to obtain the necessary approvals for a drilling campaign by mid-2016.

The plan for Pasca is to initially strip condensate and LPG from the gas flow and reinject gas into the reservoir. Subsequent gas production options include installation of an floating LNG facility preferably, but not necessarily in association with other resources. Another option is a pipeline to shore either for supply to domestic customers or to aggregate with other gas supplies into an onshore LNG or petrochemical facility.

Pasca is centrally located to be an aggregation hub for the processing of offshore stranded gas resources, most of which are dry gas and will benefit from blending with Pasca gas even after many years of liquid production and gas reinjection.

Other interest holders in Pandora are Talisman Energy Inc. 25%, Kina Petroleum Ltd. 25%, and Santos Ltd. 10%.

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