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PNG expansion on the cards

The meetings all but confirm that ExxonMobil’s PNG LNG Project and Total’s proposed Papua LNG Project will collaborate, with Oil Search holding significant stakes in each project and acting as an intermediary.

The three new trains would likely deliver an extra 8 MMt/a of LNG capacity, with two being supported by Papua LNG via the giant Elk-Antelope field, and the other supported by PNG LNG and the P’nyang field.

Oil Search Managing Director Peter Botten says he expects negotiations to begin shortly on cost sharing terms, conditions of government integration and PNG gas agreements.

“We are increasingly confident about the demand outlook for LNG from PNG, with a material shortfall in supply developing in the early 2020s, and will be targeting key northeast and southeast Asian markets for offtake agreements,”? said Mr Botten.

Oil Search has identified a number of steps before entering front end engineering and design (FEED) for the proposed expansion, including:

  • Presenting LNG expansion plans to PNG Government
  • Complete gas agreement discussions with the PNG Government
  • Complete Pre-FEED
  • Sign binding downstream integration agreements.

The Papua LNG Project is a proposed multi-train LNG development, which includes a LNG plant located at Caution Bay, approximately 20 km northwest of Port Moresby and adjacent to the PNG LNG Project site; an upstream central processing facility will be located west of the Her Base in PRL 15, close to the Purari River; and approximately 75 km onshore and 265 km offshore pipeline routes for the separate gas and condensate pipelines.

Joint venture interests in PRL 15 are Total (operator, 40.1 per cent), ExxonMobil (36.5 per cent), Oil Search (22.8 per cent) and minorities (0.5 per cent).

The PNG LNG Project involves a two-train, 6.6 MMt/a LNG processing facility and a 850 km large diameter pipeline.

First LNG was shipped in June 2014.

Joint venture participants include ExxonMobil subsidiary Esso Highlands as operator (33.2 per cent), Oil Search (29.0 per cent), PNG Government (16.6 per cent), Santos (13.5 per cent), Nippon Oil (4.7 per cent), Mineral Resources Development Company (2.8 per cent) and Petromin PNG Holdings Limited (0.2 per cent).

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