Top revenue from 2nd LNG plant: InterOil

Business, Main Stories

INTEROIL Corp is certain its proposed Elk-Antelope liquefied natural gas (LNG) project would provide attractive revenue streams to the country before 2014.
In a statement, the company said it discussed the nature of these revenue streams in the company’s presentation at the recent PNG Chamber of Mines and Petroleum conference in Port Moresby.
InterOil has described its upstream oil and gas production business segment and its separate proposed midstream LNG tolling plant business segment which formed a non-integrated project structure.
InterOil believes such a structure, with its clear lines of demarcation between upstream and midstream segments, will provide revenues to the country on a transparent basis while also potentially providing those revenues earlier to PNG’s various levels of Government and to landowners.
“InterOil is aiming to bring on stream a liquids stripping plant, to be located in Gulf province, in late 2011-12 while the LNG plant is still being built,” InterOil chief executive officer Phil Mulacek said.
“The plant will extract the liquid condensate from the gas, reinject the gas back into the reservoir and transport the liquids to its refinery or for sale in the open market.
 “The advantage for landowners, provincial governments and the State is that taxes and royalties would start flowing earlier into their respective coffers,” he said.
“All upstream stakeholders benefit from the early condensate/oil production through direct 20.5% Government ownership and 2% landowner royalty payments.”
Mr Mulacek said additional revenue was generated by the Government through the 30% company tax rate.
When the LNG plant begins its operations in late 2014-15, all upstream stakeholders would benefit from increased condensate production, natural gas production and associated profit taxes from InterOil’s non-integrated project structure, he said.
“Additionally, LNG plant stakeholders will benefit from a separate stream of revenue and profit tax from the midstream LNG plant.”
“The separate revenue streams provide increased transparency when compared with an integrated project structure.”
Mr Mulacek said based on current forecasts of production and commodity prices, 94% of the total revenues from InterOil’s project to the PNG Government would be derived from the production of oil and gas during the first 10 years.