Oil Search Ltd. (OSH.AU) said Thursday it has struck more gas in Papua New Guinea, firming up the potential of its recent P'nyang discovery to support an expansion of its US$15.7 billion gas-export joint venture with ExxonMobil Corp. (XOM).

Oil Search said a sidetrack well to its recent P'nyang South-1 well has found the original gas zone extends about 200 meters deeper than the lowest known gas in P'nyang South-1, indicating an increase in the total gas column to about 380 meters.

Exxon and partners including Oil Search and Australia's Santos Ltd. (STO.AU) want to ship liquefied natural gas from the foundation stage of PNG LNG to Asian buyers in 2014. They are trying to discover enough new gas to expand the massive terminal to three LNG production units from the original two currently under construction.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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