‘2nd LNG plan just a proposal’

Business, Main Stories

THE second PNG liquefied natural gas (LNG) project headed by InterOil Corp is still at the proposal stage, Department of Petroleum and Energy Minister William Duma said yesterday.
A final draft of the project agreement drawn up by InterOil’s subsidiary Liquid Niugini Gas Ltd (LNGL) is with DPE and stakeholders of the second LNG project.
InterOil, together with joint venture partners Petromin PNG Holdings Ltd and Pacific LNG Operations Ltd, submitted the agreement for the construction of the proposed LNG plant in Port Moresby.
Mr Duma said the Government acknowledged the amount of work InterOil had put in to the proposed project.
He added the State and its appropriate agencies would look into the draft agreement before the Government decided its next course of action.
Mr Duma said this when asked if the 10% equity being offered to the State of PNG at the plant was appropriate as experts had stated the LNG plant would generate more income during the course of the venture than any other part of the project.
The Government’s upstream equity participation is 22.5% (State 20.5% and landowners 2%) and the pipeline-plant project participation (12%) is subject to favourable terms and conditions. It has a 10% stake at the LNG production facility.
“Its all part of the negotiation process,” Mr Duma said, adding the 10% proposed equity interest had increased, but could not elaborate.
He said the proposed equity of the Government, particularly at the plant, was based on commercial reasons, adding the Government would look at this alongside other items in the draft agreement.
The proposed LNG project targets a US$6 billion (K16.5 billion) two-train LNG facility, with each train capable of producing about four million tonnes of LNG per year.
Meanwhile, InterOil has found more limestone at its Antelope 2 well in Gulf province.
It stated this was more than its pre-drill estimates
It said it had drilled into the top of the reservoir and intersected at 6,007 feet (1,831m measured depth) which was 345ft (105m) higher than the pre-drill estimates.