Remaining SPAs to be signed next year

National, Normal


OPERATOR of the PNG liquefied natural gas (LNG) project, Esso Highlands Ltd, is confident the remaining two sales and purchase agreements (SPAs) will be concluded early next year.
This was for an estimated 2.2 million tonnes of LNG from the total six million tonnes of LNG expected to be produced by the project.
The other 3.8 million tonnes had been signed with UNIPEC Asia Co Ltd, a subsidiary of China Petroleum and Chemical Corporation (Sinopec) for the supply of two million tonnes per year and 1.8 million tonnes to Tokyo Electric Power Company Incorporated (TEPCO).
The SPA for the LNG is for a 20-year period.
Esso Highlands managing director Peter Graham said they were confident the SPA would be concluded by early next year and partners would concentrate on the construction phase of the project.
The remaining SPA for the 2.2 million tonnes of LNG is with Osaka Gas and China Petroleum Company (CPC), Taiwan.
It is understood one of the companies has its board meeting scheduled for next month, during which, it should deliberate on the SPA with PNG LNG project.
Meanwhile, Santos managing director David Knox said the PNG LNG project would be funded by leading international agencies and lenders.
“The lenders have demonstrated confidence in PNG to provide the funding for this project,” he said.
Mr Knox also acknowledged the critical contribution and support of political leadership, landowners in the project areas, and PNG.
Santos had been in business in PNG for more than 25 years.
It holds 13.5% stake in the project, second to Oil Search Ltd, which holds 29%; Esso 33.2%; IPBC 19.6% (MRDC – 2.8% and Eda Oil – 0.2%); and Nippon Oil Ltd 4.7%.
“For a high quality LNG development you need very sound foundations,” he said citing the developments in SPA and confidence of lenders to the project in terms of fund plus the strong political support from PNG Government and general support of landowners in project areas including the country.
“All customers have done great efforts to conclude sales contracts with us in what is a very short period of time,” he said. 
Prime Minister Sir Michael Somare, who officiated at the PNG LNG project-sanctioned inauguration yesterday, said the project had made PNG the 17th LNG exporting country in the world.