PNG paves way towards new natural gas project

PORT MORESBY (AFP) - Papua New Guinea yesterday signed a deal with energy giants Total and ExxonMobil on a proposed new project that would significantly boost the natural gas exports from the poor Pacific Island nation.

The parties hope to finalise the Papua LNG (liquefied natural gas) project by the first quarter of next year, the French firm said in a statement, adding that they would launch initial engineering studies.

The new project, if realised, will complement production from a US$19-billion natural gas plant developed by ExxonMobil that began shipping gas throughout Asia in 2014.

In a speech at a gathering of business leaders in Port Moresby, Total CEO Patrick Pouyanne described the deal as a “first stone, an important stone” towards developing the production of natural gas, which he said would be at the “core of the evolution of the energy landscape.”

It would involve two new “trains” or production units of 2.7 million tonnes per year.

 
Total said the proposed project - located in the Gulf Province 280 kilometres (175 miles) west of Port Moresby -- will “increase Papua New Guinea from a two to four train producing supplier.” 

“We are fully committed to the success of the Papua LNG project, which benefits from a favorable geographical location close to Asian markets,” said Pouyanne. The existing ExxonMobil plant includes gas production and processing facilities in PNG’s Southern Highlands and Western Provinces, storage facilities on the Gulf of Papua and more than 700 kilometres of pipelines.

At its peak, more than 21,000 people were employed during construction with the operators having to overcome flooding and extremely steep slopes as they built infrastructure including airfields and roads from scratch.

“All told, the onshore pipeline contains enough steel to build 20 Eiffel Towers,” said Neil Chapman, senior vice-president of ExxonMobil.

The project supplies four major companies in Taiwan, Japan and China and is expected to produce an estimated nine trillion cubic feet (255 billion cubic metres) of LNG over its 30-year life.