Junior explorer Cott Oil and Gas has outlined plans to join the ranks of floating LNG producers, engaging Shanghai-based Wison Offshore and Marine to deliver a concept study for a floating vessel to support development of gas fields in Papua New Guinea.
The concept study is expected to outline a potential floating LNG concept that would be appropriate for the resource, location, gas composition and expected production rates of the Pandora gas field, in which Cott has a 40 per cent interest alongside Kina Petroleum (25 per cent), Talisman Energy (25 per cent) and Barracuda (10 per cent).
The study will provide recommendations on indicative capital expenditure requirements and operating costs and is expected to be completed by the end of next month.
Wison is currently constructing a relatively small-scale floating LNG liquefaction and storage vessel for Exmar BV at an estimated cost of $US300 million, or $US600 per tonne per annum of liquefaction capacity, which Cott said was well below the cost of the majority of FLNG projects under development.
"Wison are using proven LNG and offshore technologies and a highly experienced offshore engineering management team with its own shipbuilding capacity," Cott managing director Andrew Dimsey said.
"Wison's expression of interest validates Cott's view that the Pandora gas fields are suitable for standalone development using floating LNG technology."
Cott shares closed the day's trade 8 per cent higher at 13.5 cents.
