PRIME Minister Sir Michael Somare has welcomed the signing of an LNG sales and purchase agreement in Sydney last Friday between Esso Highlands Limited and Unipec Asia Co Ltd.
“It is fitting that the first S&P agreement for liquefied natural gas (LNG) from Papua New Guinea is with Unipec, a subsidiary of Sinopec, the People’s Republic of China’s largest listed oil and gas company,” Sir Michael said in a statement.
He said the deal made Sinopec the largest single customer for the PNG LNG project.
It has agreed to purchase two million tonnes of LNG annually over a 20-year period.
“This is a project that is close to the heart of the PNG Government. Its size and scale have the potential to transform the PNG economy and promises a brighter future for our six million people.”
Sinopec will build an LNG import terminal at Qingdao in Shandong province for LNG from PNG.
The three million tonne-a-year import facility is expected to be almost doubled in size during a second phase of development.
Sir Michael said by next year, another major Chinese company, the Metallurgical Group Corporation (MCC), would commence exports from PNG, making it the first company to produce and export nickel and cobalt from our shores.
“I look forward to cementing the PNG-China trading relationship even further through additional LNG sales in years to come following likely expansion of the ExxonMobil-led project and through purchases from other proposed LNG projects,” the Prime Minister said.
“The project will also enable customers of natural gas to use a clean fuel that will greatly minimise the impacts of climate change, a major global concern at present.”