Total-led Papua LNG project gas agreement timed for April

April 2, 2019
The natural gas agreement for the $13-billion Total SA-operated Papua LNG (Elk-Antelope) project in the Eastern Highlands of Papua New Guinea is likely to be signed on Apr. 5, according to the country’s Prime Minister Peter O’Neill.

The natural gas agreement for the $13-billion Total SA-operated Papua LNG (Elk-Antelope) project in the Eastern Highlands of Papua New Guinea is likely to be signed on Apr. 5, according to the country’s Prime Minister Peter O’Neill.

O’Neill made the announcement when giving the opening address to the Papua New Guinea Petroleum & Energy Summit Mar. 19 in Port Moresby.

O’Neill told delegates that the agreement will set out the benefits of the project and the returns to stakeholders. It also will trigger the beginning of the front-end engineering and design phase of the development that will supply gas to two LNG trains to be built next to the existing two-train, ExxonMobil Corp.-operated PNG-LNG project at Caution Bay near Port Moresby.

O’Neill said the agreement would stipulate a meaningful opportunity for local content in the project as well as a domestic market obligation that will mandate the use of some of the Elk-Antelope gas for domestic purposes, particularly electric power generation, to be marketed by state-owned Kumul Petroleum.

The agreement also will make provision for the future use of the project’s pipeline by third parties, a measure designed to improve the commercial prospects of smaller, more remote gas finds such as those in the country’s western province.

Each of the two new trains for the Papua LNG project will have a production capacity of 2.7 million tonnes/year of LNG.

Kumul Petroleum has already stated its intention to take up its mandated maximum 22.5% share in Papua LNG.

O’Neill also said discussions were taking place towards a gas agreement for the development of the ExxonMobil-operated P’nyang gas and condensate field in the Western Highlands as a single-train extension of the PNG-LNG project. It is hoped that this agreement will be signed soon after the one for Papua LNG.

P’nyang development is planned to be closely aligned with Papua LNG as the two projects will share infrastructure built for the original PNG-LNG development and bring a total of three new LNG trains to the site.

O’Neill told delegates that his government was committed to providing stability to the petroleum sector. He said it was in the interests of both the state and developers for both Papua LNG and P’nyang to progress quickly. He added that the two projects are being developed to take advantage of a predicted gap in global LNG supply in the mid-2020s.