Pacific LNG seeking JV for new gas project

PACIFIC Liquid Niugini Gas Operations Ltd (PLNGOL) is seeking funds and partners to build the proposed eight million metric tonne-a-year LNG project, with the first onshore production line likely to be about 3.7 million tonnes in capacity. 
Front-end engineering and design (FEED) may start in the second half of this year and a final investment decision (FID) could be as early as 2011, according to Henry Aldorf, Pacific LNG’s newly-appointed president.
Construction costs may have come down by as much as 40% from peak levels, and projects in PNG do not face labour problems as experienced in Australia, he said.
“In terms of the outlook for the project, in our opinion, first LNG in 2015 currently looks optimistic,” Frank Harris, global head of LNG at the Edinburgh-based Wood Mackenzie Consultants Ltd, said.
“We expect that additional clarity on the size of the resource and the entry of an established LNG player into the project will be required in order for it to reach final investment decision,” he said.
The Liquid Niugini project has a free-on-board break-even price of about US$2.25 (K6.08) per million British thermal units, by far one of the lowest for a proposed venture, Aldorf said.
That compares with US$7.49 (K20.24) per million Btu for a rival PNG LNG project by ExxonMobil, including upstream, pipelines and the plant, according to Wood Mackenzie.
The consultant doesn’t have an estimate for the Liquid Niugini project. Equatorial Guinea LNG comes in at US$1.71 (K4.62).
Condensates, a light oil found in gas, and crude oil, will further boost profitability of Liquid Niugini, Aldorf said.
InterOil may have discovered as much as 228 million barrels of a light oil to kick start a LNG plant in PNG in the Elk and Antelope field, Phil Mulacek, chief executive officer of the Whitehorse, Yukon Territory-based explorer, said.
Plans to extract condensates prior to the construction of LNG trains may also prompt development of a floating facility, which is faster to deploy, Aldorf said. 
Australia and PNG are building a slew of LNG plants to tap the demand in Asia-Pacific for the cleaner-burning fuel to reduce carbon emissions. –  Bloomberg