PNG Government ‘full steam ahead’ with $20 billion LNG project

The Papua New Guinea Government has given project partners Total, Exxon Mobil and Australia’s Oil Search the green light to proceed with their $20 billion liquefied natural gas (LNG) project.

PNG’s Minister for Petroleum Kerenga Kua granted the permission after months of uncertainty surrounding the project, which was initially signed in April this year.

The Papua LNG gas agreement had been under a cloud of doubt following the removal of the country’s Prime Minister Peter O’Neill in May.

However, the new PNG Government stated it was “committed to doing things differently from the past.”

This has resulted in majority stakeholder Total receiving the go ahead in accordance with the terms of the gas agreement.

Total will provide third party access to the petroleum pipeline, the potential for the government to take a stake in the pipeline and the formation of a joint venture with national oil company Kumul to evaluate a shipping operation.

The project involves an LNG operation of 5.4 million tonnes per annum capacity, which consists of three LNG trains and will unlock over 1 billion barrels of oil equivalent of natural gas resources.

Oil Search managing director Peter Botten commented: “We are pleased that the PNG cabinet (National Executive Council), has completed its review of the Papua LNG gas agreement and has validated the agreement as executed on 9 April 2019.”

Botten said the next step for the proposed integrated three LNG train development was the finalisation of the Phyang gas agreement.

Once signed, the PRL 15, PRL 3 and PNG LNG joint ventures can proceed into front end engineering design for the “nationally-important development.”

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