Papua LNG JV Agrees Terms with PNG for LNG Project
The Papua LNG joint venture participants have entered into a memorandum of understanding (MoU) with Papua New Guinea for the development of the Papua LNG project, JV participant Oil Search said November 16.
“This MoU marks a significant milestone for the Papua LNG Project. It paves the way for the completion of a comprehensive Gas Agreement which, together with key commercial agreements, will allow the commencement of the Front-End Engineering and Design (Feed) phase of the Project,” Oil Search’s managing director Peter Botten said.
The agreement follows the Papua LNG and PNG LNG joint venture parties reaching broad alignment in early 2018 on the preferred downstream concept for the next phase of LNG development in PNG. This comprises the construction of three 2.7 million metric tons trains, all located on the existing PNG LNG project plant site, the company said.
Two trains will be supplied with gas from the Elk-Antelope fields, while one train is underpinned by gas from the existing PNG LNG fields and the P’nyang field. Together, Elk-Antelope and P’nyang contain more than 11 trillion feet3 of undeveloped 2C gas resource, it said.
The MoU provides the framework for key terms and conditions to be included within the gas agreement as well as a timeline for the finalisation of negotiations, with the agreement expected to be signed by March 31, 2019, it said.
Papua LNG is PNG’s second LNG project. It is a joint venture which includes affiliates of Total SA (operator), ExxonMobil, and Oil Search.
The PNG LNG project, which is in operation, is operated by ExxonMobil, and Santos, National Petroleum Company of PNG, JX Nippon Oil and Gas Exploration Company, Mineral Resources Development and Oil Search also hold interest in the project.
“All parties, including the State, are aligned on the need to ensure that new LNG developments in PNG remain competitive with other new LNG projects worldwide and are committed to being early movers in supplying LNG into next decade’s fast-growing market,” Botten said.
There has been material progress made on the commercial agreements that support the integration of the Papua LNG and P’nyang developments with the PNG project, including those related to site and facility access, he said.