Page 7 - GLNG Week 08 2022

GLNG COMMENTARY GLNG

– said in late 2020 that it would focus on advanc- interest in Papua LNG and 19.6% in the original
ing Papua LNG alone, having previously been PNG LNG.
pursuing a twinned development of both The reports said ExxonMobil had agreed to
facilities. sell 12% at “fair market price” to PNG parties.
The original plans called for the addition of However, a larger proportion of the equity
three trains – two at Papua LNG and one at PNG stake in the field would need to be sold in order
LNG – as an integrated development, with the for PNG to take 34.5% in the field. Thus the
two projects located next to each other and shar- new ownership structure when accounting
ing infrastructure. But when plans to develop for PNG’s stake in the project still needs to be
the additional train at PNG LNG looked par- confirmed. Development
ticularly uncertain, Oil Search indicated that it Meanwhile, Reuters also reported that the
would turn its attention to what would initially government had secured a take of 63% under of P’nyang is
be a two-train development at Papua LNG. It the P’nyang gas field deal, compared with 49% proposed to begin
cited interest from all parties involved in simpli- in PNG LNG and 51% in Papua LNG.
fying plans for expansion of PNG’s liquefaction “This is a massive win ... and also sets a new after the 5.4mn
capacity. benchmark for future negotiations,” the PNG
Following this week’s breakthrough, though, Prime Minister’s Office said. tonne per year
the prospects for P’nyang’s development and the Development of P’nyang is proposed to begin
expansion of PNG LNG have improved consid- after the 5.4mn tonne per year (tpy) Papua LNG (tpy) Papua LNG
erably. However, the project now looks different project is brought online, which is currently tar- project is brought
compared with the original proposal, having geted for 2027. The field is estimated to hold 4.36
become decoupled from Papua LNG during trillion cubic feet (123bn cubic metres) and is online.
negotiations over the past couple of years. anticipated to take about four years to develop
once construction starts.
What next? PNG LNG currently has a nameplate capac-
ExxonMobil currently owns a 49% interest in ity of 6.9mn tpy, but can produce up to 8.5mn
P’nyang, while Santos has 38.5% and JX Nippon tpy at its peak. The breakthrough for P’nyang
owns a 12.5% stake. Local media reported this comes at a time when LNG demand is rising. In
week that under the new agreement, the PNG its annual LNG market outlook this week, Shell
government would have a 34.5% equity stake in said it anticipated demand for the super-chilled
the project – significantly higher than its 22.5% fuel almost doubling to 700mn tpy by 2040.™

Week 08 25•February•2022 www. NEWSBASE .com P7