New plans afoot to develop PNG’s stranded gas fields
Papua New Guinea’s national petroleum entity Kumul Petroleum Holdings is reportedly in early planning to develop its 100%-owned gas fields—two onshore and two offshore.
In March meetings, Kumul managing director Wapu Sonk said the company is looking at commercializing gas from Kimu and Barikewa onshore fields and from Uramu and Pandora Gulf of Papua offshore fields. Doing so could involve existing infrastructure use, including establishing a seventh LNG train at the Caution Bay plant about 25 km northwest of Port Moresby.
The Australian Financial Review quotes Sonk as saying the two existing LNG ventures, ExxonMobil-operated PNG-LNG and TotalEnergies-led Papua LNG, have been approached and agree in principle to the idea.
Sonk said Kumul’s proposals, including construction of a 1 million tonne/year (tpy) capacity LNG train and the work necessary to develop and connect gas from the four fields, could cost about $3 billion.
In total, the fields are estimated to contain about 2.5 tcf of gas, but because of their relatively isolated locations, they have not been considered commercial as single or combined entities, despite proposals over the last two decades.
Kumul was awarded licenses covering the fields in 2021.
Talks with potential development partners continue, but no timeframe has been set.
Kumul currently plans to finalize its $1.4-billion deal with Santos to acquire an additional 5% interest in the PNG-LNG project where completion has been extended to April 2023 from end-December 2022.
The company is also working to raise up to $500 million to cover costs of the Papua New Guinea government’s 22.5% back-in entry to TotalEnergies’ Papua LNG project, which has received approval to begin engineering design work.
Sonk said that 60-70% of the $10 billion in total project cost for Papua LNG will be project financed and, under terms of the JV’s agreement with the PNG government, Papua LNG partners (Total, ExxonMobil, and Santos) will pay half of Kumul’s equity share.