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PNG LNG project is 95% complete

LNG Industry,

Oil Search has released its full year 2013 results, highlighting that the PNG LNG project is now 95% complete.

2013 performance

The company delivered a strong operational and financial performance in 2013, with full year net profit of US$ 205.7 million, 17% higher than in 2012.

Oil Search managing director, Peter Botten, commented: “Oil Search delivered a strong operational and financial performance in 2013, underpinned by solid production from our PNG oil fields. 2013 also saw the smooth transition from construction to commissioning activities at the PNG LNG Project and a successful exploration programme in PNG and the Middle East.”

PNG LNG project

The PNG LNG Project, operated by ExxonMobil PNG Limited, made substantial progress in 2013, moving from 75% complete at the end of 2012 to more than 95% currently.

Construction crews are now starting to be demobilised and commissioning activities are well underway. The operator’s development personnel are progressively being replaced with ExxonMobil’s production team, who will supervise commissioning and operate future production activities.

First LNG production

The remaining construction work is expected to be complete in early 2014 and includes finishing the pipeline system and final work on the second train at the LNG site. All Oil Search-operated activities are now complete and the company is preparing to start handling and exporting project condensate, which will be co-mingled with the existing PNG oil stream, ahead of first LNG production.

In late January, the operator advised that it had narrowed the window for first LNG deliveries to the third quarter of 2014, consistent with the original schedule outlined in 2009. The operator has also advised that it remains confident it will deliver the project within the US$ 19 billion revised capital cost estimate, which was provided in late 2012.

Further LNG development

Botten added: “With construction of the foundation PNG LNG Project nearing completion, we are working closely with our partners to aggregate gas resources in the PNG Highlands and Western Province to underpin further LNG development.

“We are in the fortunate position of having a range of potential supply sources, including the P’nyang gas field and possible upside in existing PNG LNG fields. An active drilling and resource assessment programme is underway and by early 2015, we expect to be in a much better position to determine the potential supply configuration for any expansion.”

Adapted from press release by Katie Woodward

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