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Exxon expects Papua New Guinea LNG project to restart in May

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Reuters are reporting that ExxonMobil Corp expects to restart production from its Papua New Guinea LNG project at the start of May after it was shut following an earthquake in February.

The US$19 billion LNG facility, opened in 2014 in a remote location in one of Asia’s poorest and most politically troubled countries, has been closed since the powerful 7.5 magnitude earthquake.

The project is considered one of the world’s best-performing LNG operations, despite the challenge of drilling for gas and building a plant and pipeline in the remote Papua New Guinea jungle. Australia’s Oil Search and Santos are Exxon’s main partners in the project.

The LNG export terminal may not be able to produce at full capacity at first and will likely ramp up gradually, ExxonMobil LNG Vice President Emma Cochrane said.

“We are hopeful that we will be able to start in the beginning of May. We are actually ahead of schedule,” Cochrane said.

ExxonMobil has said there has not been any indication that the 700 km pipeline that delivers gas to its coastal LNG plant had been damaged by the quake, which flattened villages, killed dozens of people and spoilt water sources.

Cochrane also said the company has recertified the reserves in its P’nyang field in Papua New Guinea, and the reserves are higher than it previously thought.

“That gives us the potential to expand the facilities in the P’nyang field for the PNG LNG foundation project,” she said.

Exxon is likely to take a final investment decision this year on expanding its Golden Pass LNG terminal in Texas – a joint venture between Qatar Petroleum, ExxonMobil and ConocoPhillips, Cochrane said.

The company intends to expand its facility in Qatar, but “they have still not made a decision on partnering,” Cochrane said.

“We very much hope that Exxon Mobil will be a part of that story. But Qatar Petroleum is still considered their partnership choices.”

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