The US$15 billion PNG LNG liquefied natural gas joint venture in Papua New Guinea, operated by Exxon Mobil Corp. (XOM.AU), may fastrack an expansion to secure buyers, project partner Oil Search Ltd. (OSH.AU) said Monday.

The desire to move fast comes as rival gas export projects in Australia and Papua New Guinea scramble for Asian customers in a well-supplied market that could be made tighter if Qatar decides to ship more gas to Asia than to Europe and the U.S.

"There's a window of opportunity in the market and strong competition, and if you miss that window you might be sitting in a queue for a while," Oil Search Chief Executive Peter Botten told reporters.

The first phase of PNG LNG, capable of producing 6.6 million tons a year of LNG from two production units, is on track for completion in the first quarter of 2014, Papua New Guinea Minister for Treasury and Finance Peter O'Neill told a conference in Sydney.

Exxon Mobil representatives at the conference declined to be interviewed, but Oil Search's Botten said the project's existing expansion timetable "is being very actively worked as we speak."

Exploration drilling in the Hides and P'nyang prospects to find gas to feed a bigger terminal is currently planned to start from mid-2011, stretching into 2012.

"Our whole exploration and development program is subject to review and we've made it clear publicly that we're keen to understand our resource base in all our licenses as quickly as possible," Botten said.

There shouldn't be any problem getting relevant license renewals from the Papua New Guinean government to allow drilling to proceed, Botten said.

Botten, however, declined to confirm recent analysts' reports that a final investment decision for a third LNG processing unit is being targeted for the end of 2012.

Fereidun Fesharaki, the chairman of global energy consultant FACTS Inc., said LNG projects in Qatar are the world's most economical, with the lowest costs, and that a large Qatari LNG tanker could pull in about US$40 million more revenue from Asian customers than from buyers in the U.S.

For the time being, however, the Qataris have "got into a bit of an argument" with Asian buyers over price.

"When will they turn the ship and bring it eastwards? That's the question," Fesharaki said.

"If you are an exporter, you have to be aware that this shadow is there. And the sooner you get your act in order, and the sooner you tie up the customer, the better off you are."

Exxon Mobil's Decie Autin, who is the upstream project manager for PNG LNG, said contractors are progressing detailed engineering, procurement and execution planning in Japan and have initiated LNG site earthworks. "Manpower will steadily increase in 2011 to allow us to load the first LNG cargo from this location in 2014," Autin said.

Almost half of the project's subsea pipeline has been manufactured by a separate contractor, she said.

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