Page 6 - GLNG Week 08 2022

GLNG COMMENTARY GLNG

P’nyang partners sign gas

agreement with PNG government

The partners in the P’nyang gas project have signed an agreement with the

government of Papua New Guinea over the field’s proposed development

PROJECTS & THE partners in the proposed P’nyang devel- increased its stake in PNG LNG to 42.5% and
COMPANIES opment in Papua New Guinea’s (PNG) Western also now owns a 22.8% interest in the proposed
Province have signed a deal with the country’s Papua LNG project, operated by TotalEnergies.
WHAT: government over the development of the field. It holds a 38.5% stake in P’nyang.
ExxonMobil, Santos and The agreement marks a step forward for a pro-
JX Nippon have signed ject that has been delayed and redesigned over Breakthrough
an agreement with the the past two years as the country’s government The agreement also follows over three years of
Papua New Guinea has demanded more favourable fiscal terms for on-and-off negotiations with the PNG govern-
government over the the country. ment following a change of leadership in the
development of P’nyang. Separate announcements came this week country. PNG Prime Minister James Marape
from all three partners in P’nyang – operator took office in May 2019 following weeks of polit-
WHY: ExxonMobil, Australia’s Santos and Japan’s JX ical turmoil, including the resignation of former
The PNG government has Nippon Oil & Gas Exploration. According to Prime Minister Peter O’Neill. Marape had quit
been demanding better Santos’ statement, the agreement “provides a O’Neill’s government the previous month in
financial terms for the clear framework” for the future development of protest over resources policy and a deal signed
country from operators of the project. The deal reportedly sets out a fiscal by Port Moresby with the Papua LNG partners
resource projects. framework, as well as supporting project scop- in particular.
ing and evaluation. When Marape took office, he pledged to
WHAT NEXT: Gas from P’nyang would be used to backfill review resources laws and agreements as a pri-
Development of P’nyang the existing PNG LNG project, which is also ority, with a view to obtaining greater benefits
is proposed to begin after operated by ExxonMobil. Santos noted that up for the country. Indeed, the Papua LNG deal
Papua LNG is brought to 5% of P’nyang’s gas output would be made had to be renegotiated, with a new fiscal stability
online. available to the PNG government to support its agreement unveiled in early 2021. Meanwhile,
electrification campaign in Western Province or talks between the PNG government and Exxon-
another agreed location. Mobil over the expansion of PNG LNG and the
The announcement comes weeks after San- development of P’nyang stalled repeatedly, lead-
tos completed its merger with Oil Search in ing to considerable doubt over the project’s fate.
December. As a result of the move, Santos has Oil Search – then a partner in both projects

Gas from P’nyang
would be used to
backfill the PNG LNG
project.

P6 www. NEWSBASE .com Week 08 25•February•2022