Oil Search: PNG LNG ships 28 cargoes in Q4, 110 in 2017

ExxonMobil-operated PNG LNG project operated at an annualized rate of approximately 8.3 mtpa during the fourth quarter of 2017, shipping a total of 28 cargoes in the period. 

The production was slightly restrained due to a short rate reduction in October related to the second phase of LNG plant compressor upgrades, Oil Search the company holding a 29 percent interest in PNG LNG project said in its report.

Out of the 28 cargoes that were dispatched by the project during the fourth quarter of 2017, 21 were sold under long-term contracts and seven on the spot market. In total it was only one cargo below the third-quarter tally, Oil Search said.

For the full year, the project shipped a total of 110 LNG cargoes with 23 ending on the spot market. The total figures since the start of exports in mid-2014 have reached 370 cargoes.

Oil Search managing director Peter Botten noted that the October upgrades to the compressors enabled the plant to average 8.6 mtpa in December and will also enable the facility to maintain production above 8.5 mtpa.

In December, the project received offers for the additional 1.3 mtpa of LNG marketed by ExxonMobil on behalf of the project participants. The joint venture is expected to sign binding contracts during the first half of 2018 as strong interest has been shown by major LNG buyers for contracts up to five years.

Expansion Plans

In late December, project participants were presented with engineering studies on potential downstream development options for processing Elk-Antelope and P’nyang gas.

These studies are primarily focused on the evaluation and comparison of the downstream configuration and capacity for potential PNG LNG expansion and the development of Papua LNG, Oil Search said.

The joint venture will use these findings to determine its preferred development option, which it intends to present to the PNG Government in early 2018. This will lead to the negotiation of a final gas agreement, prior to FEED entry in the second half of 2018, with FID targeted for 2019.

Discussions on the expansion between Oil Search, ExxonMobil and Total SA have accelerated during the last quarter.

LNG expansion will be underpinned by the more than 10 tcf of discovered undeveloped gas resource in the Elk-Antelope and P’nyang fields and potentially gas from the foundation project fields.