PNG LNG production hits record high

png-lng-production-hits-record-high
PNG LNG jetty (Image courtesy of ExxonMobil)

The ExxonMobil-operated PNG LNG project achieved the highest quarterly production rate since it came onstream in 2014, co-owner Oil Search said on Tuesday.

The US$19 billion LNG project produced at an annualised rate of approximately 8.1 MTPA in the third quarter, 10% higher than in the previous quarter, Oil Search said in its quarterly report.

This was achieved despite a small reduction in gas flow and LNG production in August, when there was a peaceful landholder protest at the Hides gas conditioning plant, located in the Hela Province, related to landowners seeking a dialogue with the PNG government regarding progressing land title and benefits distribution issues, the company said.

“Following constructive discussions between the landowner leaders and government representatives, an agreement was signed which allowed some benefits to be paid and a forward plan was agreed to address remaining benefits and land ownership issues.”

PNG LNG sold 27 cargoes during the third quarter, compared to 25 cargoes in the quarter before. Out of the 27 cargoes, 23 were sold under long-term contract and four on the spot market, with three cargoes on the water at the end of the quarter.

The average price realised for LNG and gas sales increased 23 percent to US$6.44 per mmBtu, Oil Search said, adding that this reflected stronger spot oil prices in the second quarter, with an approximately three-month lag between oil and LNG contract prices.

The PNG LNG project includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central Provinces of Papua New Guinea.

There are over 700 kilometres of pipelines connecting the facilities, which includes the gas conditioning plant in Hides and liquefaction and storage facilities near Port Moresby with a capacity of 6.9 million tonnes per year.

Besides ExxonMobil and Oil Search, other PNG LNG participants include Santos, National Petroleum Company of PNG, JX Nippon Oil and Gas Exploration, Mineral Resources Development Company, and Petromin PNG Holdings.

 

LNG World News Staff

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