Government lends support for Papua LNG project

The Papua New Guinea National Executive Council (NEC) has agreed in principal to stand by the Papua LNG agreement signed in April by former Prime Minister Peter O’Neill and the PRL 15 (Elk-Antelope fields) joint venture led by Total SA.

The Papua New Guinea National Executive Council (NEC) has agreed in principal to stand by the Papua LNG agreement signed in April by former Prime Minister Peter O’Neill and the PRL 15 (Elk-Antelope fields) joint venture led by Total SA.

Papua New Guinea Minister for Petroleum Kerenga Kua said the NEC met on Aug. 2 and discussed the result of the review of the deal conducted by the state negotiating team. Meeting participants agreed that the state should stand behind the signed agreement in the best interests of the state.

“However,” Kua said, “the state has reserved its rights to discuss a shortlist of matters to be discussed with the developers.”

He said, “We believe that what we have discussed and agreed to are favorable and will not affect the general economics and fiscal terms of the Papua LNG gas agreement, however those matters are of relevance to the state and this will be placed on the table for consideration by the joint venture partners.”

He added, “In view of the very limited agenda items identified for discussion, the NEC does not believe it will take more than two weeks to conclude.”

Doubts over the Papua LNG gas agreement arose in May when then-Prime Minister O’Neill was ousted in a parliamentary vote over discontent about his handling and distribution of Papua New Guinea’s natural resources.

The $14-billion project involves the proposed development of the Elk and Antelope gas-condensate fields in the country’s Eastern Highlands via a pipeline to the site of the existing PNG LNG project at Caution Bay west of Port Moresby and the addition of two LNG trains there to accommodate the new gas supply.

The Papua LNG joint venture comprises Total, ExxonMobil Corp., and Oil Search Ltd.

Peter Botten, managing director of Oil Search, said he was encouraged by Kua’s statement.

Botten said Oil Search was committed to supporting Total and the Papua New Guinea government in resolving any final questions on the Papua LNG gas agreement, so that the P’nyang gas agreement—a proposed single-train addition to the PNG LNG project—can be finalized. Once completed, Botten said, the PRL 15 and PNG LNG joint ventures can proceed into the front-end engineering and design phase of the integrated three-train development in a timely manner.

Botten also said the Papua LNG combine is working with the government to finalize the national content plan for the project. This plan is aimed at maximizing the involvement of Papua New Guinea citizens and local businesses in the development and operation of the Papua LNG project.

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