By BIBIAN BARRENG
THE Government is pushing for the liquefied natural gas (LNG) project to kick off by 2011 with a K500 million funding allocation.
Petroleum and Energy Minister William Duma called on gas developers to get the LNG project started while prices and other factors were favourable.
“The Government is committed to seeing that the LNG project gets off, and in that regard, has in the national supplementary budget, allocated K500 million to fund its equity,” Mr Duma announced.
He was officiating at the opening of the PNG petroleum two-day seminar in Port Moresby last Friday morning.
The LNG projects – one with InterOil and the other under a joint venture of Oil Search and ExxonMobil – were into pre-FEED studies (front end engineering design).
InterOil reported that the current project consisting of two-train liquefaction plant was targeting its first production in 2012.
The ExxonMobil-led LNG project with Oil Search was scheduled to have its pre-FEED work completed by early next year, thus allowing the joint venture to make a FEED decision.
A number of arrangements were still pending with the project and as such the time frame as to when the project would deliver its first production remained indefinite.
“The Government was currently reviewing the incentives and other terms requested by Exxon and its partners under the gas agreement with the State,” Mr Duma stated.
The minister said there was enough gas in PNG for the two LNG and petrochemical projects while the hurdles remained to be the infrastructure and other challenges against commercialising PNG’s gas reserves.
Mr Duma also noted a proposal for methanol/DME that had been submitted by Japanese companies Itochu and Mitsubishi.
He said proposals had also been received for the production and export of fertiliser and for gas-to-liquids projects on which negotiations for the gas supply were also continuing.