Oil Search eyes production boost

Business

PAPUA New Guinea is on the threshold of substantial new investments that could double its liquefied natural gas (LNG) production in the coming years.
Oil Search managing director Peter Botten made this forecast whilst advocating major new infrastructure to be developed in a responsible and sustainable way.
Speaking at the PNG petroleum and energy summit in Port Moresby, Botten said the global LNG market was highly competitive with other major new projects already moving to final investment decision (Fid).
“Consequently, the next phase in PNG’s gas development and related project milestones must move forward in a timely and responsible way, and must consider lessons learnt on optimising a sustainable, responsible process,” he said.
“Good progress was made in 2018 on downstream pre-front end engineering and design (Feed) studies to support new LNG capacity (3 x 2.7 million tonnes per annum trains) with upstream pre-Feed on Elk-Antelope (PRL15) already well advanced.
“Development concepts for our associated gas expansion (AGX) project planned for 2019 were also completed.”
A memorandum of understanding was signed last year between Papua LNG and the PNG Government, setting key terms and conditions for a gas agreement, including the equitable split of value between State and developers, domestic market obligation and national content.
“The Papua LNG gas agreement will likely be finalised in early April 2019 with a gas agreement between the State and P’nyang (PRL3) joint venture to be finalised soon after,” Botten said.
“Additionally, JV partners are progressing commercial agreements supporting integration, including site and facility access.”
Global LNG demand grew six per cent last year with further growth of 4.5 per cent per annum forecast to 2030.
This is driven by government policies and northeast Asia markets prioritising gas over coal and nuclear power.
This means that by 2030, a further 120mtpa of new supply will be required.
This has seen renewed global interest to fill the supply-demand gap into the next decade, and buyers seeking to diversify LNG sources from new countries and new sellers.
Botten said Oil Search would be prioritising its exploration and appraisal activities to ensure optimal use of capital.
“In the northwest foldbelt, we are continuing to pursue opportunities for PNG LNG backfill and optimal gas field phasing to create value,” he said.
“In the forelands, we are investigating optimal commercialisation routes for Kimu, Barikewa and Uramu.
“The onshore Gulf remains an attractive proposition, with many trillion cubic feet-structures close to planned Papua LNG infrastructure.”
Balancing that, Botten emphasised the importance of maintaining operational stability through social initiatives and responsibility.
“Whilst our core business may be oil and gas exploration and production, we operate in a socially-responsible manner with strong values and high standards guiding our work,” he said.
“Our vision and values make this clear.
“Respectful, open relationships with local landowners and all levels of government are at the heart of our current and future success.
“We invest in, and deliver, ongoing social programmes including: support of Hela provincial hospital and health authority; and, continued earthquake recovery, especially in public health and infrastructure.
“We are also promoting new partnerships targeting education and training, women’s empowerment and gender-based violence, and youth engagement.
“Power projects, like the new Port Moresby power station, are aligned to the Government’s development aims as is our support on equitable benefits distribution to land owners.”

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