Oil Search, Total to discuss LNG


OIL Search says it will begin talks with Total SA, the operator of the Papua LNG project, once the acquisition process of InterOil by ExxonMobil is completed.
In its third quarter report, Oil Search says the talks will be on the possible cooperation and integration of the next phase of LNG development in the county.
Oil Search believes there is sufficient gas resource in the Elk-Antelope and P’nyang gas fields to underpin at least two PNG LNG-sized expansion trains – possibly three trains – if planned appraisal and exploration drilling is successful.
The report says building the trains on the PNG LNG plant site and sharing downstream facilities would result in considerable capital savings.
It believes it will improve operating efficiencies, generating superior returns for Oil Search shareholders, as well as for other stakeholders, including the Government and local landowners.
It notes that under all anticipated scenarios involving cooperation, two highly credentialed operators of LNG developments – ExxonMobil and Total – would be maintained in PNG for the next phase of development.
According to Oil Search, PNG’s LNG development opportunities are already in the lowest-cost quartile globally, with integration savings making LNG expansion even more competitive.
Various commercial models can be applied to deliver project integration.
Studying the various options, their relative values and how the significantly increased overall value is shared equitably between the P’nyang, Elk-Antelope and PNG LNG owners is a core component of Oil Search’s strategy refresh.

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