InterOil: We’re still in

Business, Normal

The National, Friday 30th December 2011

INTEROIL remains confident it will appoint a major LNG partner soon and move to develop its Elk/Antelope gas fields despite doubts it created by delaying the expected financial investment decision (FID) planned for year’s end to March next year.
InterOil had yet to sign up a legally binding gas sales agreement, despite three memorandums of agreements it signed for off-takes, which were non-binding.
And it had yet to apply for a petroleum development licence as it did not have money to develop its gas fields alone.
The 2009 project agreement with the state for a single large-scale LNG gas plant had not yet been reviewed to allow for scaled-down project in Gulf province.
The Department of Petroleum and Energy was expected to oppose InterOil over its preference to deal with politicians instead of the bureaucrats.
InterOil’s agreement with Flex LNG for an off-shore floating LNG plant had also lapsed, and it had yet to renegotiate and salvage that project.
Despite the foregoing odds against it, InterOil chief executive officer Phil Mulacek was “very confident on the outcome” of the search that was underway for a suitable world-class operator for the Gulf LNG project.
Mulacek did not reveal whether a big announcement was on the cards.
But he was certain of a good result.
“We have an active process and (are) very confident on the outcome,” Mulacek told
Many investors were keenly observing how the project operator hunt will play out, especially as PNG Petroleum and Energy Minister William Duma had publicly called for oil major Shell to operate Gulf LNG.
In PNG to oversee the looming Triceratops-2 well, Mulacek said the rig move was going well.
He said the rig base, sub-structure, rotary, engines and main components had been moved and were in place.
Crews were in the process of rig up – which includes setting up the consumables (such as casing and pipe) and the derrick, with the next stage being spud preparation.
“Timing (is) soon, but in PNG we are always weather dependent,” Mulacek said.
The InterOil-led Gulf LNG project was targeting a total of at least 7.6 million tonnes per annum of capacity through separate onshore and offshore LNG facilities.
Production of at least 5mmtpa had long been flagged for 2014, with ramp up options through 2015-16..
Gas would come from InterOil’s Elk-Antelope discoveries in Gulf province.
The Triceratops-2 well was aimed to test one of the various prospective reef structure reservoir targets in InterOil’s licence areas, with spudding previously scheduled to take place this month.