Oil Search and the participants in the Papua New Guinea liquefied natural gas (PNG) project have signed a joint operating agreement, paving the way toward commercialisation of PNG’s gas resources.
The joint operating agreement outlines the rights and obligations of the PNG LNG Project joint venture participants, covering all commercial aspects of the project including gas supply arrangements, unitisation principles and voting requirements.
“The agreement paves the way to progress into the Front End Engineering and Design phase of the project, subject to the conclusion of a gas agreement with the PNG government,” Oil Search managing director Peter Botten said.
The project operator is Exxon Mobil and has 41.6% stake in the project, whilst Oil Search holds 34.1% interest, Santos has 17.7% .
AGL Energy holds 3.6% and Nippon Oil holds 1.8%.
Oil Search said should the PNG LNG Project proceed, it will contribute significantly to PNG’s economy, from capital investment, direct cash flow from government and landowner equity involvement, taxes and royalties, employment and business development opportunities.
The PNG LNG project proposes to commercialise the Hides, Angore and Juha fields and the associated gas resources in the currently operating oil fields of Kutubu, Agogo, Gobe and Moran in the Southern Highlands and Western Provinces of PNG.
The gas will be treated at a gas conditioning plant at Hides then transported via pipeline to a 6.3 million tonne per annum LNG liquefaction and storage facility proposed to be located 20km north-west of Port Moresby on the Gulf of Papua.
ExxonMobil released a statement together with that of Oil Search today.
“ExxonMobil is pleased to have the JOA executed as it is an important step in the progression of the project. Our focus now turns to resolving the fiscal terms and related matter with the PNG State which are critical for the project to enter the front end engineering and design phase,” Vice president of ExxonMobil Development Al Hirshberg said.
Oil Search gained 10 cents to $4.46, and Santos added 17 cents to $13.19. AGL was down 11 cents to $11.05.
