Total signs gas agreement for Papua LNG project

Total has signed an agreement with the Government of Papua New Guinea (PNG) to proceed with the development of a $13bn Papua liquefied natural gas (LNG) project.

Folowing the deal, the French company will be the operator of the project alongside its partners Oil Search and ExxonMobil.

The project is based on the Elk-Antelope resources in petroleum retention licence PRL15.

Oil Search stated that the agreement will allow the partners to begin engineering and design work for the project, which will involve the construction of three LNG trains with a production capacity of 2.7Mtpa each. On completion, the facility is expected to double the country’s export capacity.

Two of the LNG trains will be fed with gas from the Elk-Antelope fields, while the third train will receive gas from existing PNG LNG fields and the yet-to-be-developed P’nyang field.

A final investment decision on the project is expected to be made in 2020, while the first production is planned for 2024.

Total chairman and CEO Patrick Pouyanné said: “The finalisation of the gas agreement is a major milestone for Papua LNG project that confirms the commitment of all partners and the Government of Papua New Guinea to make the project a success for all stakeholders.

“We are very pleased with the progress of this competitive LNG project that benefits from the brownfield synergies with existing liquefaction facilities and the proximity to Asian markets. It will further strengthen our position in the Pacific basin and ensure our future LNG portfolio growth.”

According to the agreement, the Government of Papua New Guinea and relevant landowners will acquire a 22.5% equity stake in the Papua LNG project. Total’s interest will be 31.1%, while Exxon Mobil and Oil Search will own 28.7% and 17.7%, respectively.

Oil Search managing director Peter Botten said: “Oil Search’s focus will now move to working with PRL 3 operator ExxonMobil and the state to close out an agreement with the state for the development of the P’nyang field and the commencement of the FEED phase for the proposed three-train integrated development at the PNG LNG plant site.”