DARWIN, Australia, July 17 (Reuters) - Australian energy firm Nexus Energy Ltd NXS.AX plans to spend about A$1 billion ($975 million) on exploration over the next three years to secure more gas reserves that could help support a liquefied natural gas (LNG) project.
Managing Director Ian Tchacos told an industry conference on Thursday the firm would focus its gas exploration programme around the Crux field off northern Australia and it hoped to find enough gas resources to underpin an LNG development.
“If the gas reserves get large enough, then we won’t just be looking at a liquids recycling project, but a potential LNG project,” he said.
Nexus was targeting production of 40,000 barrels per day of condensate from its Crux and Longtom projects by late 2010, with about 35,000 barrels coming from the Crux project, Tchacos said.
“The main issue is to find the capital to bring these projects forward. This has been a challenge for the industry, but for Nexus, we are confident of being able to get the capital,” he told the oil and gas industry conference in Australia’s northern city of Darwin.
Tchacos said the firm was considering using floating LNG technology, which allows the commercialisation of smaller fields. He added that Nexus would move towards an LNG project once it proved up its gas reserves to between 1.5 and 3 trillion cubic feet (tcf).
Nexus' Crux field, in which Royal Dutch Shell Plc RDSa.L has a stake in some of the permits, has proven and probable reserves of about 71 million barrels of condensate and about 2 tcf of contingent gas resources.
Tchacos said a final investment decision for the $1.2 billion Crux project was due later this year and, when in production, the project would deliver gross pre-tax cashflow of A$1 billion. ($1=1.026 Australian Dollar) (Reporting by Fayen Wong; Editing by Alan Raybould)
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