Page 12 - GLNG Week 18 2021

GLNG AUSTRAL ASIA GLNG

Total resumes push towards

FID for Papua LNG

PROJECTS & FRANCE’S Total announced this week that fol- tonnes per year. PNG LNG currently has a
COMPANIES lowing talks with the government of Papua New nameplate capacity of 6.9mn tpy, but is produc-
Guinea (PNG), it was remobilising project teams ing well above this level, with output reaching
and other required resources to move the pro- 8.8mn tpy in 2020.
posed Papua LNG project forward. “I confirm that this project is ranking very
The company said progress on the project has high in Total’s portfolio given its proximity to
been delayed by about a year owing to the coro- growing Asian LNG markets and we will dedi-
navirus (COVID-19) pandemic. However, it cate all necessary resources,” stated Total’s chair-
had previously been targeting a final investment man and CEO, Patrick Pouyanné.
decision (FID) in 2020, but under its new plan, The company’s push to resume work on
front-end engineering and design (FEED) work Papua LNG comes amid a major setback for its
would be launched in early 2022, followed by an under-construction Mozambique LNG terminal
FID in 2023. in East Africa. (See: Wider implications of unrest
While Total attributed the delays to COVID- in northern Mozambique, page 4) Last week, the
19, the political environment in PNG has also company declared force majeure on the pro- The company’s
posed challenges as the government has sought ject amid deteriorating security conditions in
more favourable terms for the development of Mozambique as Islamist insurgents carried out push to resume
new resource projects. attacks increasingly closer to Total’s site.
Indeed, Total and its partners ExxonMobil Total has said the project could be delayed by work on Papua
and Oil Search had originally planned to develop at least a year, but this depends on the Mozam-
Papua LNG as part of a three-train expansion bican government’s ability to contain the insur- LNG comes amid
of ExxonMobil’s PNG LNG in a $13bn project gency – which some are highly sceptical about. a major setback
aimed at achieving multi-billion dollar savings. Consultancy Rystad Energy commented this
However, ExxonMobil has not agreed to the week that the delays to Mozambique LNG – and for its under-
terms being sought by the PNG government for potentially to the not-yet-sanctioned Rovuma
the P’nyang gas development, which would have LNG project in the same region – could cause construction
helped underpin the expansion. the global LNG market to tighten in the second
As a result, Total’s Papua LNG project will half of the decade. This was not anticipated pre- Mozambique LNG
go ahead with two new trains that will be inte- viously, and indeed Rystad warned that annual terminal.
grated into the PNG LNG site instead, and will supply deficits could be seen in the late 2020s,
be supplied with feedstock gas from the Elk and given that Mozambique LNG and Rovuma LNG
Antelope fields. together represent 28mn tpy of LNG.
Total and the PNG government signed a fiscal Under these circumstances, it is not surpris-
stability agreement on Papua LNG in February, ing that Total is focusing on bringing new sup-
with the parties committing to stick to terms ply online elsewhere in the world. Partner Oil
agreed previously in 2019. Search has said the project would enter service
Papua LNG will have a capacity of 5.6mn in 2027.™

P12 www. NEWSBASE .com Week 18 07•May•2021