Tag Archives: P’nyang LNG

Oil Search CEO says new PNG leader unlikely to demand big concessions on gas deals

Oil Search CEO Peter Botton

* Oil Search CEO confident on Papua LNG, P’nyang deals

* Comments follow PNG PM vowing to raise revenue from resources

Jonathan Barrett | Reuters | 6 June 2019

The head of Papua New Guinea-focused energy firm Oil Search Ltd said he did not expect to make any significant new concessions on a gas deal it and ExxonMobil Corp hope to strike with the South Pacific nation’s new leader.

Commodity and energy firms with projects in the resource-rich archipelago like Oil Search have been closely watching the agenda of Prime Minister James Marape since his election by parliament last week on a platform of economic reform.

A policy speech Marape made on Wednesday offered investors some relief as he said changes would be slow.

Oil Search managing director Peter Botten told the Sydney Mining Club at a lunchtime address that the P’nyang gas agreement, which has yet to be finalised, would resemble a deal already brokered on the Papua LNG project led by Total .

“I don’t envisage there will be any changes to the Papua LNG gas agreement,” Botten said, meaning the P’nyang agreement would be unlikely to see major change either.

“I am confident about that (but) I’m not 100-percent confident because I need to sit down with the government, as does Total as operator.”

Oil Search has previously said it hopes to agree terms for P’nyang this month.

Marape, a former finance minister, has promised he would be “taking back” the economy and revising resource-sector laws after the resignation of his predecessor, Peter O’Neill.

Marape said on Wednesday that he wanted to increase the amount of revenue flowing from resource projects, after years of underwhelming returns most notably from the gargantuan PNG LNG project, run by Exxon in partnership with Oil Search and others.

But changes would be gradual, Marape said, and unlikely to take effect before 2025.

Papua LNG, operated by Total, plans to develop the Elk and Antelope gas fields to feed two new liquefied natural gas processing units, called trains, at the PNG LNG plant.

Oil Search and Exxon also plan to add a third new train at the plant, partly fed by gas from the P’nyang field.

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Papua LNG group signs MOU with Papua New Guinea

Rick Wilkinson | Oil and Gas Journal | 16 November 2018

The Papua LNG joint venture partners led by Total SA have signed a memorandum of understanding with the government of Papua New Guinea for development of the Elk-Antelope gas-condensate fields, known as the Papua LNG Project.

The scope of the agreement includes priority terms and conditions forming the basis for a gas agreement as well as a timeline for negotiation. The gas agreement is scheduled for finalization during first-quarter 2019.

The MOU follows the Papua LNG and the ExxonMobil Corp.-led PNG-LNG joint venture parties reaching broad alignment earlier this year on the preferred downstream concept for the next phase of LNG development in Papua New Guinea.

The plan involves the construction of three 2.7 million tonne/year capacity LNG trains on the existing PNG-LNG plant site at Caution Bay just west of Port Moresby. Two trains will be supplied with gas from the Elk-Antelope fields and the third train by gas from existing PNG-LNG fields and the yet-to-be developed P’nyang field in the Western Highlands. Together Elk-Antelope and P’nyang contain an estimated 11 tcf of undeveloped 2C gas resource.

The Papua LNG Project is based on the Elk-Antelope reseources in petroleum retention license PRL15 in the Eastern Highlands. Total has 31.1% interest, ExxonMobil has 28.3% interest acquired when it bought InterOil Corp. earlier this year, and Oil Search Ltd. has 17.7%. These percentages are after the state of Papua New Guinea has backed into the project for 22.5%.

Papua New Guinea Prime Minister Peter O’Neill labeled the MOU as “another historic moment for Papua New Guinea and the beginning of the development of the second LNG (Project) in our country.”

He said, “Today’s memorandum paves the way for us to enter into a project gas agreement which will be negotiated between the parties over the next 3-4 months and to be concluded by Mar. 31, 2019.”

Peter Botten, managing director of Oil Search which, like ExxonMobil, is a participant in both joint ventures, said pre-FEED downstream studies on the three-train development concept are well under way. The scope of the engineering work includes design, process, and layout optimization of the expansion concept from the gas inlet to the LNG loading arm.

“Work taking place includes the brownfield tie-ins, compressor driver selection, LNG loading and shipping, condensate treatment, storage and loading, and execution planning,” Botten said. “We expect this will underpin entry into the full FEED stage.”

Botten added that discussions between the government negotiating team and the P’nyang (PRL—3) joint venture are well advanced. “With an integrated FEED entry decision required to advance the three-train expansion at the PNG-LNG site, completion of the gas agreement between the government and the PRL-3 joint venture is expected to occur in a similar timeframe to the Papua LNG Project,” he said.

The recent MOU for Papua LNG was signed as a show piece for Papua New Guinea during the Asia Pacific Economic Conference (APEC) in Port Moresby in the presence of Papua New Guinea Prime Minister O’Neill and Total Chairman and CEO Patrick Pouyanne.

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