PNG LNG Signs Supply Deal with PetroChina

The co-venturers in the Papua New Guinea LNG project have entered into a sale and purchase agreement (SPA) with PetroChina International for the supply of about 0.45mn metric tons per year of the fuel for three years beginning this month, project participants Santos and Oil Search said in announcements to the Australian Stock Exchange July 20.

“We are delighted to have entered into a SPA with PetroChina, which has been an active buyer of spot LNG cargoes from PNG LNG. The first sale under the new agreement is expected to take place this week,” Oil Search managing director Peter Botten said.

This SPA takes the total contracted volumes from the project to 7mn metric tons per year, with 6.6mn metric tons of PNG LNG’s annual output already committed under long-term contracts to JERA, Osaka Gas, Sinopec and CPC, the two companies noted.

“ExxonMobil, on behalf of the PNG LNG Project participants, is in negotiations with a number of other parties for potential LNG supply agreements, which are expected to be finalized in the near term,” Botten added.

PNG LNG is operated by ExxonMobil (33.2%), with Santos (13.5%), National Petroleum Company of PNG (16.8%), JX Nippon Oil and Gas Exploration Company (4.7%), Mineral Resources Development (2.8%), and Oil Search (29%) holding interests in the project.

Since coming back fully online in late April following an earthquake in the region earlier in the year, the PNG LNG project achieved an annualized production rate of 8.5mn metric tons per year over May and June, which compares to 8.3mn metric tons per year for the 2017 full year, Oil Search said earlier in the week.