Papua New Guinea conditionally approves InterOil LNG project

The Papua New Guinea government cabinet has approved InterOil Corp.’s Gulf LNG project to be supplied by the Elk-Antelope onshore gas fields with conditions including the 50-50 split of the development between the government and InterOil.

Prime Minister Peter O’Neill said in a statement that Papua New Guinea’s National Executive Council had approved the 50-50 project in which the government would acquire an additional 27.5% stake over and above its legal 22.5% entitlement, which is managed by state nominee Petromin.

The acquisition would give the government a combined half interest in the Elk-Antelope assets. It is probable that some of this equity would be managed for the benefit of capital-lacking landowners.

Elk and Antelope are carbonate reservoirs, technically part of the same field, but separated by a major fault.

O’Neill alluded to the fact that the terms in which the State will acquire the additional equity still need to be agreed.

O’Neill added that the cabinet had also flagged the possibility of two separate development paths. “Cabinet approved that the project may be commercialised equally and simultaneously on a 50-50 basis between the state and InterOil based on the available saleable gas, using two separate processing facilities,” he said.

He said an internationally recognised LNG operator should operate the upstream facilities, meaning that the government still wants a major player to buy an operating stake in Gulf LNG.

The announcement also alluded to the fact that Petroleum and Energy Minister William Duma last year criticized the development for straying from the original project agreement struck in 2009. Cabinet has now approved the “conditional withdrawal” of its notice to terminate the 2009 project agreement. This is subject to the parties agreeing to certain conditions, including “developing saleable gas on a 50-50 basis.”

A Ministerial Gas Committee headed by Minister Duma has been formed, while a separate bureaucratic negotiation team has also been established with representation from the petroleum department, treasury, the justice department and Petromin.

These teams have been charged with fast-tracking the negotiations leading to commercialisation of the country’s second LNG project (after the ExxonMobil-operated PNG-LNG scheme).

A number of questions still remain.

The original 2009 agreement was based on a one-plant project of 7.6 million tonnes/year of LNG. The exact capacities of two LNG plants mooted in the new agreement have not been specified publicly, but it is likely that they would have a capacity of about 4 million tpy each.

Ongoing negotiations will also decide what form the plants will take—conventional, modular, or floating LNG. There also will have to be input from the company or group of companies acquiring an operating stake in Gulf LNG.

Another question is how the government will finance the acquisition of an additional 27.5% stake.

Related Articles

NCOC lets $1.8-billion pipeline contract for Kashagan field

02/06/2015 North Caspian Operating Co. (NCOC) has let a $1.8-billion engineering and construction contract to ERSAI Caspian Contractor LLC, a subsidiary of Sa...

AOPL releases 2015 safety performance and strategic planning report

02/06/2015 The Association of Oil Pipe Lines is committed to further improvements despite a 99.99% safe petroleum liquids delivery rate, AOPL Pres. and Chief ...

PAA to expand Delaware basin crude pipeline systems

02/05/2015 Plains All American Pipeline LP (PAA) plans to build two Delaware basin crude oil pipelines and related gathering systems, to expand its existing B...

Alberta’s premier seeks more North American energy integration

02/05/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance’s po...

Oil, gas infrastructure investments essential, House panel told

02/04/2015 Investments in oil and gas transportation and storage should move ahead because they are essential in continuing the US economic recovery and North...

Inpex starts development drilling at Ichthys field

02/04/2015

Inpex Corp. has started development drilling in Ichthys gas-condensate field in the Browse basin, about 200 km offshore Western Australia.

BG’s 2015 budget ‘significantly lower than 2014’

02/03/2015 BG Group plans capital expenditures on a cash basis of $6-7 billion in 2015, a range it says is “significantly lower than 2014” due to “a lower oil...

Live Oak LNG to build Calcasieu Ship Channel liquefaction, export site

02/03/2015 Live Oak LNG LLC, a subsidiary of Parallax Energy LLC, Houston, will invest $2 billion to develop a 5-million tonne/year liquefaction plant and LNG...

EPA suggests DOS reconsider Keystone XL climate impact conclusions

02/03/2015 The US Department of State might want to reconsider its conclusions regarding potential climate impacts from the proposed Keystone XL crude oil pip...
White Papers

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected