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    Oil Search Calls for Integration of PNG LNG, Papua LNG Projects

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Summary

Oil Search has said that integration of PNG LNG project and the proposed Papua LNG project would be beneficial for both the projects in current low energy price environment.

by: Shardul

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Asia/Oceania

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Oil Search Calls for Integration of PNG LNG, Papua LNG Projects

Oil Search has said that integration of PNG LNG project and the proposed Papua LNG project would be beneficial for both the projects in current low energy price environment.

“Oil Search believes that there is an excellent opportunity to maximise the value of the potential PNG LNG project expansion and the proposed Papua LNG project through cooperation and integration,” the company said earlier this month.

Oil Search has interests in both ExxonMobil operated PNG LNG project, which is due for expansion, and Total operated Papua LNG project, which is based on development of the Elk-Antelope gas fields.

The company believes use of existing infrastructure and the co-location of plant sites would help drive capital efficient investment, cost and operational synergies and schedule acceleration, maximising returns for all stakeholders, including the PNG government, landowners and co-venturers.

“Generating maximum shared value through working together is particularly important if there is an extended period of low oil and gas prices,” Oil Search said.

LNG demand is expected to surpass supply in Asia Pacific region by early next decade which will provide a market window for the potential third PNG LNG train and the proposed Papua LNG project, allowing these high heating value gas projects to secure premium Asian markets, Oil Search said.

“Given the sharp decline in oil and gas prices, only low cost projects are likely to proceed to development in the short to medium term. Both the potential third PNG LNG train and the Papua LNG Project continue to offer the prospect of attractive returns, despite the present oil price weakness,” the company added.

Meanwhile, in its first quarter results announced last week, Oil Search said PNG LNG project, in which Oil Search has 29 percent stake, achieved its highest quarterly production since coming onstream, producing at an annualised rate of approximately 8 mtpa, up from 7.6 mtpa in the fourth quarter of 2015 and 16 percent above nameplate capacity.

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