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PNG LNG to continue operating above design capacity

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LNG Industry,

According to Reuters, the Papua New Guinea LNG (PNG LNG) project is predicted to operate at a minimum of 6% above its original name plate capacity through 2016. Oil Search Ltd owns a 29% stake in the operation, and rejected a takeover proposed from Woodside Petroleum Ltd in September worth AUS$11.7 billion. Reuters reports that Oil Search said that Woodside “grossly undervalued” the company.

The PNG LNG project was designed to operate a capacity of 6.9 million tpy, but, in September, it ran at a rate of 7.4 million tpy. Oil Search claims that it expects the project will continue to operate at a minimum of 7.3 million tpy going into 2016.

Reuters reports that a spokesman for the PNG LNG operation said: “Demand for the project's spot volumes remained robust, reflecting the proven reliability of the plant and the high heating value of the gas relative to LNG projects globally.”

Further expansion is now being planned, with PNG LNG owners – led by ExxonMobil – focusing on building a third LNG train. The majority of the gas is expected to be taken from the P’nyang field, or potentially from the Muruk prospect. Oil Search addressed landowners’ concerns over delays by assuring that measures were being taken to resolve who was owed money from the Papua New Guinea government from LNG revenue.

Oil Search reportedly said: “The project retains strong support from the local community.”

Edited from various sources by David Rowlands

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