INTEROIL Corporation has signed a joint venture agreement with Japanese oil company, Mitsui & Co Ltd to jointly operate and fund the preliminary works involved to develop a proposed condense striping facility at InterOil’s Elk and Antelope field in the Gulf province.
In a statement last Thursday, InterOil announced that the preliminary work programme was for all the works required to take them through the Front End Engineering and Design (FEED) stage for the construction of a condensate stripping plant, to the point of final investment decision (FID).
The project is proposed to be designed to process 400 million standard cubic feet per day (mmscf/day) of well head gas with an anticipated yield of approximately 9,000 barrels (bbls) of condensate per day.
Dry gas will be re-injected into the reservoir for storage until the proposed LNG facility is constructed.
The condensate will be barged to the InterOil refinery in Port Moresby for processing and sale.
InterOil and Mitsui will each be responsible for half of the capital expenditure involved in the preliminary works and Mitsui will fund InterOil’s share.
Standard conditions of the agreements include the completion of FEED, an EPC agreement, and the definitive agreements by Dec 31, necessary to reach FID.
In the event that FID is not reached, InterOil will be required to refund the capital expenditure incurred to date within a specified period.
InterOil said it was looking forward to a long and prosperous relationship with Mitsui, one of the largest energy conglomerates in Japan.