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GLNG COMMENTARY GLNG
PNG seeks better deal on P’nyang project
The government wants to secure better terms from
the country’s next natural gas development and has ExxonMobil’s proposed PNG LNG expansion in its sights
POLICY
WHAT:
PNG has said it wants secure a bigger share of the profits from the P’nyang development.
WHY:
The government is unhappy with its take from previous natural export projects.
to
gas
PAPUA New Guinea (PNG) Petroleum Minister Kerenga Kua is once more on the war path over how much the government receives from the country’s natural gas developments.
After much toing and froing earlier this year over the gas agreement the government signed with Total on the Papua LNG project, and even- tually backing the original terms, Kua has now set his sights on ExxonMobil’s as yet to be agreed upon P’nyang project.
Kua told Reuters on the sidelines of a recent industry event in Japan that he was looking for “far better” terms from a P’nyang gas agreement than were agreed upon for Papua LNG. Exxon- Mobil is leading the development of Petroleum Retention Licence 3 (PRL 3), which contains the P’nyang field and will feed a new 2.7mn tonne per year (tpy) train to be built at the US super-major’s $19.5bn PNG LNG plant.
Talking terms
Kua said the government was waiting for Exxon- Mobil to supply some information before formal talks could begin, without specifying the details.
Talks on P’nyang were put on hold after the government sought to revise the terms of the Papua LNG agreement.
Kua has been a vocal critic of the Papua LNG
deal and began pushing for a review of the agree- ment following his appointment in June. The deal had been signed by former prime minis- ter Peter O’Neill’s government, but was almost immediately cast into doubt following O’Neill’s resignation in April.
After Kua said at the start of August that the cabinet had “agreed in principle” to honour the agreement, he announced two weeks later that he was leading a team to Singapore to renegoti- ate terms. The government finally endorsed the Papua LNG gas agreement in September.
Total has a 31.1% interest in the PRL 15 joint venture, which is developing the Elk-Antelope gas discovery that will feed Papua LNG, post the state’s back-in right of 22.5%. ExxonMobil owns 28.3% and Oil Search has the remaining 17.7%.
When asked by Reuters over whether the government would agree to the same terms for P’nyang as were agreed for Papua LNG, Kua said: “It has to be better. It has to be far better. That’s the key point.”
When asked to comment on the minister’s statements, an ExxonMobil spokeswoman sim- ply said the verification of the Papua LNG agree- ment “confirms the commitment of all parties to make the project a success”.
ExxonMobil and Oil Search each own 36.86%
WHAT NEXT:
Port Moresby may have more success in its talks with ExxonMobil given the project’s early stage of development.
Papua New Guinea Petroleum Minister Kerenga Kua is looking for “far better” terms from a P’nyang gas agreement than were agreed upon for Papua LNG.
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Week 39 03•October•2019