According to Reuters, Oil Search – the co-owner of the ExxonMobil Corp. Papua New Guinea LNG (PNG LNG) project – has said that the project is considering multi-year contracts for sales of spot cargoes into order to handle excess production.
Reuters claims that the move is unorthodox in an industry dominated by long-term contracts, and reflects the project’s strong output. Two years after start-up, the project is now producing 12% over nameplate capacity at 7.7 million tpy. In 1Q16, the project reportedly sold eight spot cargoes, beyond the 6.6 million tpy locked in long-term contracts to customers in Asian countries, including Taiwan, China and Japan.
Presently, the PNG LNG project is having the proven reserves in its foundation gas fields recertified. Oil Search is reportedly confident that this will result in a larger reserve base, which could underpin multi-year contracts spot cargoes in the future.
Edited from various sources by David Rowlands