BARNABAS ORERE PONDROS
CHINA has joined the multi-billion kina PNG LNG project by entering into a heads of agreement (HoA) with Esso Highlands Ltd for the long-term supply of two million tonnes per annum of liquefied natural gas to China.
Esso Highlands Ltd, a subsidiary of project developer ExxonMobil, announced that the project participants entered into a HoA with Unipec Asia Co Ltd, a subsidiary of China Petroleum and Chemical Corporation (Sinopec).
The signing in Port Moresby followed bilateral talks held yesterday between Chinese vice-premiere Li Keqiang and senior PNG Government ministers led by Deputy Prime Minister Sir Puka Temu at Parliament House.
It is understood that liquefied gas will be supplied to a LNG-receiving terminal that Sinopec will build in China
The commercial terms of the agreement were not disclosed, but the agreement is timely as it comes just a month away from the final investment decision by ExxonMobil.
“We are pleased to have reached this important milestone with Sinopec,” Ron Billings, vice-president of ExxonMobil gas and power marketing, said.
With this agreement in place, the PNG LNG project is now conducting exclusive discussions with major Asian LNG customers for binding sale and purchase agreements covering the full project capacity.
Esso’s public affairs boss Miles Shaw assured that both parties would now work closely to reach a binding agreement.
“We will now continue to work closely to finalise a sales and purchase agreement which is the final step to completing a binding agreement,” he said.
Wang Zhigang, senior vice-president of Sinopec, was delighted that the agreement was signed.
“We are pleased to have signed this significant HoA with the PNG LNG project,” he said.
He also envisaged that both parties would work closely to finalise the sale and purchase agreement as soon as possible.
The signing, which is significant to the PNG LNG project, was also a boost for PNG-China bilateral relations, Prime Minister Sir Michael Somare said.
“It is anticipated that our bilateral figures will experience a significant boost once appropriate commercial arrangements in the energy sector, such as the LNG arrangements, are in place,” Sir Michael said.
PNG is China’s largest trading partner among other Pacific Island nations.