State, firm sign K36 billion project

THE fiscal stability agreement for the US$12 billion (about K36 billion) P’nyang LNG project in Western was signed by the Government and the project partners in Port Moresby yesterday.
The project co-venturers are Esso PNG P’nyang Limited and Ampolex (Papua New Guinea) Limited – both ExxonMobil affiliates – with affiliates of Santos and JX Nippon.
The signing follows the execution of the P’nyang LNG Project gas agreement in February, 2022, and positions it in the queue to potentially become the country’s third LNG export project.
Prime Minister James Marape said the signing was a testament to PNG’s dedication to fostering increased economic activities, and to send a positive signal to investors in the extractive sector.
“You were our anchor managing partner in the PNG LNG Project, entering our country through that project in the early part of this millennium,” he said.
“And you fully understand the necessity for our country to benefit more from resource projects, proving yourselves as exemplary partners.”
Chairperson of Esso PNG P’nyang Limited Tera Sandro said the development of the P’nyang LNG Project would deliver “significant benefits to all its stakeholders and further enhance Papua New Guinea’s position as an LNG- exporting nation”.
Western Governor Taboi Awi Yoto, acknowledging the efforts of ExxonMobil, the Government, and stakeholders, highlighted the significance of the province’s involvement in the project negotiations.
“This is unprecedented for provincial governments like ours to participate in the negotiation process of such a critical national resource project,” he said.
The proposed ExxonMobil-operated P’nyang LNG Project would deliver LNG by constructing new upstream facilities in Western linked to existing infrastructure.
Subject to a final investment decision by the P’nyang LNG Project co-venturers, the development of the P’nyang LNG Project is to begin after the Papua LNG Project in support of economic development in PNG.
The P’nyang LNG Project would be an independent one, with landowner benefits to be provided under a future benefit-sharing agreement to be negotiated by the State in accordance with the Oil and Gas Act.
The P’nyang field is located within Petroleum Retention License 3, which covers 105,000 acres (425 square kilometres).
The field is estimated to have 4.36 trillion cubic feet of gas.
Esso PNG P’nyang Limited operates the licence and together with Ampolex (Papua New Guinea) Limited, these ExxonMobil affiliates have a 49 per cent interest.
Affiliates of Santos and JX Nippon have a 38.5 percent interest and 12.5 percent interest, respectively.