First export in 2021
The National, Friday April 24th, 2015
THE first export of liquefied natural gas from the Gulf LNG project operated by French oil major Total SA is expected in 2021, InterOil executive vice president Isikeli Taureka (pictured) says.
“Total and its partners InterOil and Oil Search plan to begin marketing a total of 6.8 million tonnes of LNG per year from the project mainly to buyers in China and Japan,” Taureka told Reuters on Wednesday.
The project would become Papua New Guinea’s second, after ExxonMobil PNG Ltd in May last
year began exports from its US$19 billion (K51 billion) PNG LNG project. Taureka said the new project, drawing gas from the Elk and Antelope fields, hoped to take advantage of many LNG contracts expiring in North Asia around that time.
He added that he expected Chinese demand to double.
The project “would be taking advantage of contract expiring in North Asia, a rebound in energy prices … and China will be doubling in demand,” Taureka said.
However, the project may face competition from LNG from North America and Australia, where projects will ramp up towards the end of the decade.
Asian LNG prices have more than halved since last year in tandem with lower oil prices and as demand growth fails to keep up with new supply.
“Preliminary estimates show the Elk and Antelope fields in Gulf hold 5-9 trillion cubic feet of natural gas, although reserves will only be confirmed once an appraisal study is complete by the middle of this year,” Taureka said.
Total bought a 40.1 per cent stake in the project from InterOil in April last year for US$429 million (K1.165 billion).
The sale was disputed by Oil Search, which claimed it had the right to buy the stake, but lost the case in international arbitration.
Total has made few comments on the project, but said Papua New Guinea holds the right to acquire a 22.5 per cent stake in the project once a final investment decision has been made, which would lower Total’s stake to 31.1 per cent.
InterOil has a 36.5 per cent stake in the project, while Oil Search holds about 23 per cent.