PNG Threatens to Cancel Western LNG Upstream Licence

Some of the potential supply for the Western LNG project in Papua New Guinea could be at risk following the country’s petroleum minister issuing the joint venturers in an upstream development licence a notice of intention to have it revoked.

“As advised on 2 May 2018, the PDL 10 joint venturers received a notice of intention to cancel Petroleum Development Licence No. 10 (PDL10) and Pipeline Licence 10 (PL10),” Horizon Oil said July 5.

Subsequently, the PNG petroleum minister convened a meeting with the PDL10 joint venture participants and committed to take no action before October 1 until such time as the participants had further presented to him on the status of the development planning, Horizon said.

But, on July 4, the operator of PDL 10, Spanish global energy company Repsol, received further notices of intent to cancel PDL 10 and PL 10 on January 4 next year and has given the participants until July 25 to show why the licences should not be cancelled, Horizon said.

“Horizon Oil has formed the view that each of the Purported Notices is without merit. Further, and similar to the earlier notices, Horizon Oil has formed the view that the notices of intention to cancel the licences are procedurally invalid,” the company said.

In May, Horizon, which has a 30% participating interest in PDL 10, said the licence for the Stanley field constitutes about 20% of the resource volume that will supply the proposed Western LNG project.

The Western LNG project is planned to have a 1.5mn-2mn metric tons/year nameplate capacity and to be running in time to meet an expected undersupply in the Indonesian archipelago, South China Sea Rim, Chin and India from 2023, Horizon said in March.