PNG Gas

The PNG Gas is a project to develop the Hides gas field in the Southern Highlands of Papua New Guinea, and to construct a natural gas liquefaction plant.

History

Originally it was planned to transport the gas to Australia via convert|4000 |km |mi |-2 long offshore pipeline. A subsidy of Chevron, South Pacific Pipeline initiated the project in 1998 with an Environmental Impact Statement. The plan was to build a pipeline from Kutuba, through Gobe and Kopi to Bamaga and then south to Gladstone in Queensland, where it was to be connected with existing infrastructure. However, in January 2007 the connecting pipeline project was suspended, mostly due to a lack of foundation load customers, and the project partners started working on the LNG project.cite news
url = http://www.reuters.com/article/sphereNews/idUSSYD7149620070201?sp=true&view=sphere
title = Oil Search shelves PNG pipeline for LNG plant
publisher = Reuters
date = 2007-01-31
accessdate = 2008-03-01] On 22 May 2008, the Government of Papua New Guinea and project consortium signed an agreement outlining fiscal and legal framework for the project.cite news
url = http://www.upstreamonline.com/live/article155336.ece
title = PNG LNG players sign on the line
publisher = Upstream Online
date = 2008-05-22
accessdate = 2008-06-07] cite news
url = http://www.downstreamtoday.com/(S(hrpf0u55nrk2rrba3cxjzlrr))/News/Articles/200805/LNG_Project_Expected_To_Underpin_PNG_s_E_11033.aspx?AspxAutoDetectCookieSupport=1
title =LNG Project Expected To Underpin PNG's Economy for Decades
publisher = Downstream Today
date = 2008-05-27
accessdate = 2008-06-07]

Technical description

The two-train LNG plant will have capacity of 6.3 million tonne of LNG per annum. In addition to the gas from the Hides field, potentially gas could be sourced also from the Juha and Angore fields. The pre-FEED study was completed by the end of 2007. The decision to proceed with the Front End Engineering Design (FEED) will be made at the end of March or early April 2008.cite news
url = http://www.downstreamtoday.com/(S(grgrku55im0k1vjyomgykhqj))/News/Articles/200802/AGL_Considers_Selling_Stake_in_PNG_Proje_9053.aspx
title = AGL Considers Selling Stake in PNG Project
publisher = Downstream Today
date = 2008-02-29
accessdate = 2008-03-01] The FEED most likely would be prepared by KBR. The final investment decisions should be made in 2009. The plant is expected to be commissioned by 2013 and it is expected to cost US$9.5 billion, of which the development of the Hides, Juha and Angore gas fields together with a pipeline to the coast may cost US$5 billion, while the LNG plant could cost US$4.5 billion.cite news
url = http://www.rigzone.com/news/article.asp?a_id=43736
title = Santos Joins Papua New Guinea LNG Study
publisher = Rigzone
date = 2007-04-11
accessdate = 2007-08-03] cite news
url = http://www.upstreamonline.com/incoming/article132896.ece
title = Oil Search puts PNG LNG price at $9.5bn
publisher = Upstream Online
date = 2007-05-04
accessdate = 2007-08-03]

Project company

The project is led by ExxonMobil, who will be also the operator of the plant and sell the project's output on behalf of the owners. ExxonMobil owns 41.6% of participating interest. Other partners of the project are Oil Search Limited (34.1%), Santos Ltd. (17.7%), AGL Energy (3.6%), Nippon Oil (1.8%) and MRDC (a PNG company representing landowner interests - 1.2%).cite news
url = http://www.upstreamonline.com/live/article150710.ece
title = PNG LNG players thrash out details
publisher = Upstream Online
date = 2008-03-14
accessdate = 2008-03-14] cite news
url = http://www.downstreamtoday.com/News/Articles/200707/AGL_ExxonMobil_Studying_LNG_Project_in__4583.aspx
title = AGL, ExxonMobil Studying LNG Project in Papua New Guinea
publisher = Downstream Today
date = 2007-07-03
accessdate = 2007-08-03] Equities will change when the PNG State nominees join as equity participants at a later date.cite news
url = http://www.downstreamtoday.com/News/Articles/200803/Papua_New_Guinea_LNG_Partners_Sign_Joint_9373.aspx
title = Papua New Guinea LNG Partners Sign Joint Operating Agreement
publisher = Downstream Today
date = 2008-03-14
accessdate = 2008-03-14] AGL Energy is considering divesting its stake in the project as its main interest was the gas pipeline to Australia, and not LNG.

References