Page 9 - AsianOil Week 34 2021

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around 130 km north-west of Hides, the main nominal take, described the lack of engagement
field that feeds PNG LNG. P’nyang was discov- as “disappointing”.
ered by Chevron in 1990 and P’nyang South by Chairman and CEO Ian Munro said: “Twinza
ExxonMobil in 2012. remains hopeful that both parties can honour
In 2018, ExxonMobil said that it had the terms and agreement of the July 6, 2021 and
increased its estimate of the gas resource at that we can move immediately into the [front-
P’nyang by 84% to 4.36 trillion cubic feet end engineering and design] FEED phase of the
(123.5bn cubic metres). The proposed develop- project.”
ment of P’nyang might incorporate construction Twinza is planning to enter the FEED phase
of a new pipeline to the field from Hides. once a gas agreement had been finalised. A final
During previous talks on P’nyang, Exx- investment decision (FID) had been slated for
onMobil and its partners were proposing to 2022, with first production anticipated in 2025.
develop the field to support a third train at Oil and gas companies are not only being
PNG LNG, which currently has a capacity dragged to the negotiating table over new pro-
of more than 8.3mn tpy. However, while this jects, however, with Santos and Oil Search’s
option may still be on the table, the compa- proposed AUD22bn merger also under Port
nies are now considering bringing the field Moresby’s scrutiny.
online at a later date to feed the existing trains
as current feedstock gas supplies are depleted, What next
according to previous comments from Oil Oil Search said this week that it was in talks with
Search, one of the project’s partners. the PNG government over the proposed merger
ExxonMobil and Oil Search also own stakes after Port Moresby warned that the merged com-
in Papua LNG, where front-end engineering and pany must not reduce its footprint in the country
design (FEED) work could start next year. “We do not wish for the largest oil and gas
News of talks with Port Moresby should be company operating in our country to simply be
welcome news, but as Twinza can acknowledge, a branch office of a foreign company,” Marape
anything short of a signed agreement means very said on August 5. “Any proposed merger must
little in PNG these days. satisfy the national interest test.”
Oil Search has almost 1,000 employees in
Pasca A pickle PNG, with nearly 90% of those being nationals,
Twinza said on August 24 that a deadline for acting Oil Search CEO Peter Fredricson told the
talks between itself and the State Negotiating Sydney Morning Herald on August 24. The exec-
Team (SNT) on a final draft of terms for the utive added: “The way we engage with PNG will
Pasca A gas agreement had passed without the continue to be positive.”
government’s negotiators trying to engage with However, Credit Suisse has previously cited
the firm. PNG’s “higher political risk” as a question mark
The two sides concluded talks on July 6 on against Santos’ merger proposal. Indeed, the
terms for the $2.4bn Pasca A, the country’s first Sydney Morning Herald quoted analyst Saul
offshore gas project, with expectations high that Kavonic on August 24 as warning that Port
a final agreement could have been signed as soon Moresby could try to use its powers of approval
as the end of the month. Kua said on July 13 that to “extract more value”.
the deal would mean the state would receive 55% The PNG government is capitalising on
of the project’s gross income. strong LNG prices to force the hand of upstream
But Twinza said this week that despite Kua’s developers. The government is intent that any
statement to Parliament on August 10 that the deal it signs must give it the best return possi-
two sides had seven days to finalise a draft agree- ble. This has slowed down projects and derailed
ment, the SNT had not made itself available to investment plans and, while higher gas prices
meet despite Twinza’s continued efforts. give Marape’s administration an edge in current
Twinza, which confirmed that the state negotiations, it will do little to improve the coun-
would take 60% of project value or a 55% try’s credibility with future investors.™

Week 34 26•August•2021 www. NEWSBASE .com P9