Price has no impact on PNG: Firm

MELBOURNE: Australia’s Oil Search Ltd said yesterday that current weak spot liquefied natural gas (LNG) prices would have no impact on any arbitration over a long-term contract between Japan’s Osaka Gas and the Papua New Guinea PNG LNG project, operated by ExxonMobil Corp.
“The current market has no impact on the discussions,” said Ian Munro, Oil Search’s executive vice-president for gas marketing, told analysts at am earnings briefing yesterday.
Munro was asked to comment on what terms Osaka Gas was seeking to change in its long-term sale and purchase agreement (SPA) with PNG LNG, in which Oil Search was a partner.
He said each SPA with a customer is tailor-made, so it was hard to generalise how an arbitration might play out.
“An arbitration may or may not be able to rule on price. Any subsequent negotiations may or may not be retroactive,” he said.
“It’s very much bespoke and it will certainly play out over the next few years.”
ExxonMobil Corp and Osaka gas earlier this month declined to comment on arbitration this month. – Reuters